2 ms·
Yup. A bank run is problematic because if you keep 99% of the money but 100% of your customers want cash today, then you're screwed.
by jrockway 4y ago
Yup. A bank run is problematic because if you keep 99% of the money but 100% of your customers want cash today, then you're screwed.
- hnfong 4y agoThe more modern treatment of this situation is that if you sold the mortgage on the open market as a mortgage backed security you might still be solvent as long as the MBS is valued at least at face value. The real problem with failing banks is that interest rates rose steeply, and thus the MBS devalued by a significant amount.