5 ms·
Because a bank can go under, and you can lose your money in excess of the insured amount.
by secabeen 7y ago
Because a bank can go under, and you can lose your money in excess of the insured amount.
- deleted 7y ago[deleted]
- SilasX 7y agoNot if it's a bank that specifically caters to this crowd and doesn't take any of the normal risks associated with lending.
- kgwgk 7y agoThey would have two options: A) keep the euro notes in their vault, which only works if you deposit paper bills in the first place B) keep electronic deposits in the ECB and pay interests to do so In either case if they give back the money to the clients when they ask for it how do you expect them to cover their operating costs (plus the interest they are charged by the central bank in case b)?
- deleted 7y ago[deleted]
- rags2riches 7y agoThis imaginary bank would still have costs. What would be their income?
- mdemare 7y agoExcellent question. There is a company, The Narrow Bank, that has the same idea, but they didn’t get a banking license from the Fed. Matt Levine, whose newsletter you should clearly start reading, has the details: https://www.bloomberg.com/opinion/articles/2018-09-06/fed-rejects-bank-for-being-too-safe https://www.bloomberg.com/opinion/articles/2018-09-06/fed-re...
- SilasX 7y agoThis is the first responsive answer I've gotten to that question.
- beamatronic 7y agoYou mean like... a German bank? They will happily do what you ask. For a small fee. In the form of a negative interest rate.
- dmoy 7y agoAnd your deposit won't be insured past like 100k euro.