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>> FTX is a brokerage not a bank. Furthermore, banks have strict regulations on the kinds of loans they are allowed to give. Also, bank accounts are secured by
by TuringNYC 4y ago
>> FTX is a brokerage not a bank. Furthermore, banks have strict regulations on the kinds of loans they are allowed to give. Also, bank accounts are secured by FDIC.
Also, banks have capital leverage ratios they need to abide by. FTX had no concept of leverage ratios or haircutting assets by liquidity.
- dheera 4y ago> Also, banks have capital leverage ratios they need to abide by. I mean yes, but it's just a band-aid for a shitty system in which they allow banks to lend money they don't have, so they needed some ratio to control the mess they created. In in ideal system nobody lends money that isn't their own. Period.
- dantheman 4y agoIn an ideal system they don't lend out demand deposits, but lend out money from cds and other instruments.