4 ms·
No, you have it backwards. Insolvency means the value of their liabilities exceeds the value of the assets. The bank owned long term bonds that lost value and
by itsoktocry 4y ago
No, you have it backwards.
Insolvency means the value of their liabilities exceeds the value of the assets. The bank owned long term bonds that lost value and could no longer cover deposits. That's what happened, that's why people started pulling money from the bank.