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> insolvency is - the inability to pay debts at maturity What is the maturity of deposits?
by kgwgk 4y ago
> insolvency is - the inability to pay debts at maturity
What is the maturity of deposits?
- eganist 4y agoFor all practical purposes, the moment of withdrawal. Though the FRB states that "maturity" is not something that applies to these types of accounts. https://www.federalreserve.gov/boarddocs/supmanual/cch/200601/int_depos.pdf https://www.federalreserve.gov/boarddocs/supmanual/cch/20060... page 2 That's also why CDs exist. Far easier for FIs to actually do something with the money when you lock up with them and drastically reduce the risk of you withdrawing it. Edit: Fed source.
- kgwgk 4y agoDo you consider a bank with one billion in deposits and one million in assets solvent as long as there are no withdrawals? Are Ponzi schemes solvent until they collapse?