2 ms·
No bank can bet the deposits will stay the same: Through the short-term economic cycles, people will accumulate for 6 months, 2 years, 10 years, then deplete. C
by eastbound 4y ago
No bank can bet the deposits will stay the same: Through the short-term economic cycles, people will accumulate for 6 months, 2 years, 10 years, then deplete. Covid hits? Everyone needs 3 grand at the same time. Government gibs money? Everyone has 3 grand extra for a few weeks. Everyone gets paid on the 1st of the month. You can average, but everyone will hit the low at the same time.
- IrnBru 4y agoNot true. Imagine there was only ONE bank.
- spacebanana7 4y agoI see what you’re getting at but people could still withdraw paper money or do international transfers. A single global bank in a world without paper money/gold/etc might be different.
- IrnBru 4y agoOf course I am being simplistic and a run can occur precisely because there is more than one bank... But on the international transfer thing... you selling USD and buying EUR doesn't result in the creation or destruction of any USD or EUR deposits overall, unless the central bank/government is intervening.