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Who is lying in this case? Banks are one, if not the most, regulated companies in the US. What are banks lying about and who are they lying to? I'd assume th

Who is lying in this case? Banks are one, if not the most, regulated companies in the US. What are banks lying about and who are they lying to? I'd assume the government would come down on them pretty hard if it turns out that all banks are lying to their customers as federal and state regulations on banks are pretty heavy handed to make sure that the vast majority of banks are healthy at any given time.

recursivedoubts 4y ago
The bank is telling two or more people they own (or, at least, have access to) the same dollar at the same point in time. With duration matching you can have loans, but it is clear that depositor A can't get dollar X back until time point T, and that borrower B can have the dollar until then.
- JohnFen 4y ago
  > The bank is telling two or more people they own (or, at least, have access to) the same dollar at the same point in time But they don't do that. Or, I've literally never seen them do that. What the bank tells me is what my current deposit is. That's the truth. They aren't representing that the amount they're listing is a specific dollar somewhere, they're telling me how much money I've given to them.
  - recursivedoubts 4y ago
    They are telling you you can have all that money immediately. And they are telling that to all the depositors. That's the lie. It's a bit abstracted due to aggregation, admittedly, but that's the lie. I use a single dollar just to make the idea concrete.
    - JohnFen 4y ago
      > They are telling you you can have all that money immediately. I don't think they're even telling you that. And that is absolutely not what we were taught about banks in school. I think that banks do assume that everyone basically knows how banking works, though, so they don't engage in an educational program about it when you open an account. What banks have told me is that my deposits are safe (in the sense that I won't lose my money) up to $250k. That's true enough. And I also remember reading the paperwork I signed when I've opened accounts where they specifically say that my deposits might not be available at the moment I want to withdraw them, for various reasons.
    - jnwatson 4y ago
      No responsible bank says that. They absolutely have the right to limit withdrawals, and they explicitly say that if you read the fine print.
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recursivedoubts 4y ago

The bank is telling two or more people they own (or, at least, have access to) the same dollar at the same point in time. With duration matching you can have loans, but it is clear that depositor A can't get dollar X back until time point T, and that borrower B can have the dollar until then.

JohnFen 4y ago
> The bank is telling two or more people they own (or, at least, have access to) the same dollar at the same point in time But they don't do that. Or, I've literally never seen them do that. What the bank tells me is what my current deposit is. That's the truth. They aren't representing that the amount they're listing is a specific dollar somewhere, they're telling me how much money I've given to them.
- recursivedoubts 4y ago
  They are telling you you can have all that money immediately. And they are telling that to all the depositors. That's the lie. It's a bit abstracted due to aggregation, admittedly, but that's the lie. I use a single dollar just to make the idea concrete.
  - JohnFen 4y ago
    > They are telling you you can have all that money immediately. I don't think they're even telling you that. And that is absolutely not what we were taught about banks in school. I think that banks do assume that everyone basically knows how banking works, though, so they don't engage in an educational program about it when you open an account. What banks have told me is that my deposits are safe (in the sense that I won't lose my money) up to $250k. That's true enough. And I also remember reading the paperwork I signed when I've opened accounts where they specifically say that my deposits might not be available at the moment I want to withdraw them, for various reasons.
  - jnwatson 4y ago
    No responsible bank says that. They absolutely have the right to limit withdrawals, and they explicitly say that if you read the fine print.
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