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So, first off, I am not very literate when it comes to the comings and goings of banking procedures, so forgive me if this is a dumb question. Would an inciden
by UnpossibleJim 4y ago
So, first off, I am not very literate when it comes to the comings and goings of banking procedures, so forgive me if this is a dumb question.
Would an incident like this make other banks shore up their defenses about this sort of thing happening to them, or will more banks fall due to market conditions in general?
- deleted 4y ago[deleted]
- tinco 4y agoWell a defense might be to increase their liquidity by selling those treasury bills, which would drive their price even lower, making other banks also be illiquid on paper. So yeah I imagine all the banks nervously looking at eachother. Who is going to pussy out the first and cause them all to tumble over.
- adrr 4y agoFed could buy it and set a price floor on it.
- e-clinton 4y agoBoth would be my guess. I’m expecting more smaller banks to fall.
- opportune 4y agoYes, this may trigger many banks to sell off long term underwater assets which would further reduce their prices, incentivizing further sales. It can also trigger more bank runs that put time pressure on banks to do this. Bad situation overall