Full-reserve banking

Full-reserve banking is a theoretically conceivable banking practice in which all deposits, banknotes, and notes in a financial system would be backed up by assets with a store of value. This does not imply the existence of a government body (such as a central bank) that would convert currency to a more stable type of asset if requested to do so. A bank could engage in full reserve banking by issuing private currency backed by a commodity. It requires that the resources available to the banks issuing credit money and demand deposits would be sufficient to convert all currency at once if so required. It was a central component in Social Credit proposals.