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In the first example, is it possible to repay all the debt? The bank has $100 cash and $11 promised. Customers have $10 cash and $100 promised. Assuming the per
by FinanceAnon 6y ago
In the first example, is it possible to repay all the debt?
The bank has $100 cash and $11 promised. Customers have $10 cash and $100 promised. Assuming the person with $100 withdraws the money and wants to share it with the other person to pay off his loan, they end up with $99, but they started with $100. If they started at $0 they would be at -$1.
How is this resolved in a real banking system?
- andrewaylett 6y agoThe customers started with $100 and the bank started with $0. By the end, the customers have between them paid the bank $1 for their services.