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No. Not having any money, you want to prevent redemptions and get people to increase deposits. Like imagine you are doing a ponzi right, you have 1b of assets
by im3w1l 4y ago
No. Not having any money, you want to prevent redemptions and get people to increase deposits.
Like imagine you are doing a ponzi right, you have 1b of assets and owe your customers 2b. Then with outflows this could turn into say 0.1b of assets and owing 1.1b - game over. But with inflows it could turn into 9b of assets and owing 10b. Now you just have to do a tiny bit of gambling on stocks or bonds to be solvent. Burn the books and it's like it never happened.