3 ms·
Seems to just mean 30 days of average outflows, i.e. a bank should be ok for that long without any money coming in via new deposits, loan repayments, etc. Of co
by andreareina 4y ago
Seems to just mean 30 days of average outflows, i.e. a bank should be ok for that long without any money coming in via new deposits, loan repayments, etc. Of course the issue is when you have larger-than-average withdrawals...
https://www.investopedia.com/terms/l/liquidity-coverage-ratio.asp https://www.investopedia.com/terms/l/liquidity-coverage-rati...
- Scoundreller 4y agoProbably doesn’t help that this is very a niche bank. Lots of orgs running their payroll from this bank, but few retail account holders. At a typical community/regional bank, payday is just a bunch of bill entries: debit the corp account and credit the employees accounts. Meanwhile a business-focussed bank will just have huge debits every Friday without corresponding credits: those are happening at other banks. And with a small number of account holders, it doesn’t take many actors to cause an a bank run. Payday sealed the fate here.