3 ms·
No, the problem was that VC's led and pushed for the panic withdraw of all funds. The bank would have had no problem if it was just the case of fewer new depos
by beezle 4y ago
No, the problem was that VC's led and pushed for the panic withdraw of all funds.
The bank would have had no problem if it was just the case of fewer new deposits. As to expense draw downs, those would have been ongoing and part of normal business operation.
- tsimionescu 4y agoIt was a panic becaaue they realized the bank was vulnerable and so their money was vulnerable. This wasn't an irrational panic, it was the kind of panic you experience when being chased by a bear.
- vkou 4y ago> No, the problem was that VC's led and pushed for the panic withdraw of all funds. If you knew that your bank was insolvent, would you withdraw your funds before SHTF? Or would you twiddle your thumbs until everyone else did that, and your accounts got frozen, with you sweating bullets over whether or not you'll be taking a haircut on your deposits? Would your withdrawal be a 'panic', or simply a rational decision to not be the moron left holding what might be an empty bag?