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It’s cash, until the bank converts it to something else. For example a loan. Yes, it is initially cash. But if the bank wants to make any money, it needs to co
by mbreese 4y ago
It’s cash, until the bank converts it to something else. For example a loan.
Yes, it is initially cash. But if the bank wants to make any money, it needs to convert that cash into some other vehicle for generating interest.
- rkagerer 4y agoOne way to generate interest is to simply park it at the Fed. Check out The Narrow Bank for the story of an upstart that wanted to make that their whole business model. https://johnhcochrane.blogspot.com/2018/09/fed-nixes-narrow-bank.html https://johnhcochrane.blogspot.com/2018/09/fed-nixes-narrow-...
- prottog 4y agoThank you for this! Very interesting.