"Banks in the United States typically hold less than 10%, and even less than 5%, of their customers’ savings. This is particularly true among smaller regional banks.
As an example, BB&T bank is holding about $3.2 billion in cash equivalents on $131 billion in customer deposits. That’s a ratio of just 2.4%.
The rest of customer deposits are mostly invested in residential mortgage backed securities (similar to those which collapsed in 2008) and commercial loans. In fact, the bank’s loan portfolio exceeds total customer deposits. Not exactly the picture of financial health."
This means the money that you think is safe in the bank is not actually safe. See when you deposit money in the bank, they don't just hold it there and keep it in the vault. They do keep some of it (maybe less than 10%), but the rest the bank uses. They can use it to purchase something that will give them what they think is a safe return on money. Sovereign Man says they use it to buy things such as residential mortgage backed securities.
So an individual who puts money in the bank thinks they actually have that money in the bank. What they did was exchange their money for an IOU. They become a holder of an IPU as an unsecured creditor.