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That's kind of what's going on here already. If the company is able to resume withdrawals then everyone is going to withdraw and it's over. If the company is no
by Canada 4y ago
That's kind of what's going on here already. If the company is able to resume withdrawals then everyone is going to withdraw and it's over. If the company is not able to do so then it's ultimately going to be liquidated, and then it's over. What isn't clear is how and when the depositors want that to happen. There are going to be positions where you could liquidate now at a loss, or you could wait it out and that position is whole or at a profit. Who gets to decide?
It's less bad overall if the company suspends withdrawals and tries to sort it out in an orderly manner than if it just hastily liquidated everything to survive the run until the moment of running out of assets to deliver.