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When will people realize that "depositing" money somewhere is lending it to the people taking your "deposit". Regulated deposit taking institutions have rules
by rswail 4y ago
When will people realize that "depositing" money somewhere is lending it to the people taking your "deposit".
Regulated deposit taking institutions have rules on what they're allowed to do with that loaned money.
Governments may insure those that loaned money, because a bank is inherently unstable, it borrows short, but lends long.
So any "bank run" where all depositors (creditors) want their funds back will break the bank, because it will be unable to do the same thing for the loans that it has.
None of this is new.
- chinathrow 4y ago> money I think in this case, it would be fine to call it "money" in quotes too.
- nobody9999 4y ago>So any "bank run" where all depositors (creditors) want their funds back will break the bank, because it will be unable to do the same thing for the loans that it has. cf. this informative documentary[0]. [0] https://en.wikipedia.org/wiki/It's_a_Wonderful_Life https://en.wikipedia.org/wiki/It's_a_Wonderful_Life