2 ms·
Right, but a run on a bank does not necessitate collateral damage. As an example, let's say Capital One has been fractional banking (as they all do) but for so
by fastball 5y ago
Right, but a run on a bank does not necessitate collateral damage.
As an example, let's say Capital One has been fractional banking (as they all do) but for some reason people get paranoid about it and there is a run on the bank. Everyone tries to withdraw money Capital One doesn't have. As long as the govt doesn't step in and socialize losses on the back of the taxpayer, you're left with a bunch of people who had "deposits" at Capital One that are now non-existent because Capital One doesn't have any money left. Those people are of course hurt, but the person who only banks with Chase would be hurt how?
- notahacker 5y agoPeople who only bank with Chase are likely owed money or expecting income from Capital One customers who now unexpectedly do not have any money. Also, Chase customers start worrying about the security of their money, and they start to withdraw from Chase faster than Chase debtors pay off their loans
- WanderPanda 5y agoThey would benefit from the deflation and maybe actually hurt by the guns of the Capital One customers. But looking at the low percentages of equity on banks balance sheets I think one bank run would easily jump over to other banks just because of the fear that they might happen