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Inter-bank transactions need to be done with real money (the "reserves")? So a bank run could be done online? If enough customers of bank A send money to bank
by ArtTimeInvestor 5y ago
Inter-bank transactions need to be done with real money (the "reserves")?
So a bank run could be done online? If enough customers of bank A send money to bank B, then bank A has to file for bancruptcy?
- mempko 5y agoYes, this is a risk banks need to manage. They typically do this by not having all the reserves tied to instant access accounts. So deposit accounts where the person cannot take everything out at once like savings and CDO.