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Is a bank a ponzi scheme if its assets don't exist also? Like if a bank has $10B in customer deposits and one of their armored truck drivers escapes across the
by pcthrowaway 4y ago
Is a bank a ponzi scheme if its assets don't exist also?
Like if a bank has $10B in customer deposits and one of their armored truck drivers escapes across the border with $2B, then some customers can't be paid back when they try to withdraw, does that make it a ponzi?
- re-thc 4y agoIf you can't be paid at all it's not a Ponzi. The point is to rely on newer funds to pay the older requests.
- selestify 4y agoBanks also rely on “newer funds” (from loan payments) to pay “older requests” (customers withdrawing their deposits). When withdrawals from old requests rise so much that they can’t be covered by new funds, banks collapse.
- basch 4y agoNot just to pay old requests. To pay revenue sharing / dividends / interest to shareholders. A Ponzi scheme is repurposing inflows to appear as revenue to a fake business.