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It wouldn’t need to be the entire depositor base. If only 2% of banks by deposits were to fail then FDIC would itself be bankrupt and require a bailout.
by lowkey 4y ago
It wouldn’t need to be the entire depositor base. If only 2% of banks by deposits were to fail then FDIC would itself be bankrupt and require a bailout.
- balderdash 4y agoYou’re forgetting the ~ 10% of tier 1 capital, and even more in other buckets…
- seanw444 4y agoPlus, every time you think a social issue "would never ever happen," it happens.
- xur17 4y agoOnly if 2% of banks lost all of their money. It would more likely be something like 10% of banks by deposits lost 20% of their money.
- lowkey 4y agoI disagree with your numbers. Based on current bank reserves, if ~20% of a banks deposits were to be withdrawn the bank would be insolvent. You don't need to withdraw 100% of deposits to have a run on the bank.