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In a word, no. Banks are required to more in assets than they have in client liability, and to write down the value of those assets based on risk. So they have
by LatteLazy 5y ago
In a word, no.
Banks are required to more in assets than they have in client liability, and to write down the value of those assets based on risk. So they have >100% coverage.
- runeks 5y agoGood point. However, OP specifically said “cash”, not assets in general.
- LatteLazy 5y agoThats fair, though I don't think anyone is holding cash exactly equal to their liabilities. Tether certainly aren't, they make money by investing the revenue they receive if I understand the "claims" correctly...
- jkhdigital 5y agoI think he means capital coverage, which is roughly 5% under the current regulatory scheme. That is, every dollar in liabilities must be covered by at least 5 cents of bank capital.