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Because it's not actively generating value, and is in fact actively losing value thanks to inflation. It's legally considered a "liability" in the context of a
by ketzo 5y ago
Because it's not actively generating value, and is in fact actively losing value thanks to inflation. It's legally considered a "liability" in the context of a lot of banking regulation.
- stryker7001 5y agois it more fair to say one reason they don't like holding cash because they have to pay interest to their depositors on it without getting any return on it? So putting the cash to work (in a reverse repo) even at 0.05% allows them to convert it to an asset and generate some return.