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You are only insolvent if you have $160B in withdrawals. If the deposits sat until the bonds matured, the $150B in currently liquid assets would be worth more t
by hgsgm 4y ago
You are only insolvent if you have $160B in withdrawals. If the deposits sat until the bonds matured, the $150B in currently liquid assets would be worth more than $150B.
- loeg 4y agoIf your books say $150B in assets against $160B in deposits, you're insolvent. HTM/MTM is upstream of this.
- westurner 4y agoHow would the strict separation between savings deposits and investment banking from Glass-Steagull (1933) (which was repealed by GLBA in 1999) banking regulations have prevented this? From "1999 Repeal of Glass-Steagall was the worst deregulation enacted in US history" (2022) https://news.ycombinator.com/item?id=30206570 https://news.ycombinator.com/item?id=30206570 : > Yeah what was the deal with that dotcom correction in the early 2000s? Did banks invest differently after GLBA said that they can gamble against peoples' savings deposits (because they created a 'sociallist' $100b credit line, called it FDIC, and things like that don't happen anymore) > Decline of the Glass-Steagall Act: https://en.wikipedia.org/wiki/Decline_of_the_Glass%E2%80%93Steagall_Act https://en.wikipedia.org/wiki/Decline_of_the_Glass%E2%80%93S... > Dot-com bubble: https://en.wikipedia.org/wiki/Dot-com_bubble https://en.wikipedia.org/wiki/Dot-com_bubble