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Tbh, yes - a bank run by definition occurs if "everyone else is doing it", and in this case it sure seems like we're moving in that direction. And it's benefici
by xur17 4y ago
Tbh, yes - a bank run by definition occurs if "everyone else is doing it", and in this case it sure seems like we're moving in that direction. And it's beneficial to be the first out, with no real benefit to waiting and seeing.
- nonethewiser 4y agoBut what started it?
- UncleOxidant 4y agoLots of speculation right now, but we'll eventually find out. Like Buffet is fond of saying: you find out who is swimming naked when the tide goes out.
- DeRock 4y agoLiquidity crunch, probably as startups are drawing down cash to pay bills/payroll/interest payments… Trying to convert eg. long term treasuries held by the bank to cash for satisfying customer withdrawals takes time, and has costs. If too many customers attempt to do this in a short period of time, you start having to delay withdrawals, panic spreads and the process escalates and feeds back on itself.
- chii 4y ago> with no real benefit to waiting and seeing. what the bank could do is announce a period of time, where you'd get a much higher interest payment for keeping the deposits in. So at least a portion of people would prefer getting the interest payments, rather than withdraw, and thus give breathing room. The bank might suffer a loss in the short term from paying out the interest, but would not collapse due to the (now non-existent) run.