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> They weren’t insolvent yesterday Didn't management/CEO/someone high up in the company say something like "We're safe unless everyone pulls out their money" t
by capableweb 4y ago
> They weren’t insolvent yesterday
Didn't management/CEO/someone high up in the company say something like "We're safe unless everyone pulls out their money" the other day, indicating that they were de facto insolvent?
- ummonk 4y agoThat just indicates they didn't have liquidity to cover every deposit, which is true for basically every bank that doesn't charge you to store your money in a vault.
- capableweb 4y agoWhich I guess makes it about semantics. If everyone takes out there money one at a time, one person each week, over years, they would be solvent. But if everyone did it at the same day, they wouldn't be able to handle it, making them insolvent.
- kragen 4y agoi think by that definition all fractional reserve banks are 'de facto insolvent', which would make this a definition of 'de facto insolvent' that isn't useful for fractional reserve banks, since it doesn't distinguish among classes of fractional reserve banks and yes, the ceo did say that yesterday, which is likely why this happened