3 ms·
The problem is incentives. Banks are required at least a 10% cash colateral (deposits) to issue new loans. If the funds are automatically invested into stocks/b
by jprafael 5y ago
The problem is incentives. Banks are required at least a 10% cash colateral (deposits) to issue new loans. If the funds are automatically invested into stocks/bonds/etfs, then the capital available for banks to issue new (profitable) loans decreases.
- debarshri 5y agoThat's not a great premise for a company either. You are implying that this company is a risky investment.
- vineyardmike 5y agoIt is a risk. It doesn't sound FDIC insured AND you can face market loss.