4 ms·
The same thing that keeps them from doing that now. Banks are required by regulation to keep enough liquidity on hand and have restrictions on what kinds of ass
by slashdev 3y ago
The same thing that keeps them from doing that now. Banks are required by regulation to keep enough liquidity on hand and have restrictions on what kinds of assets they can hold. They don’t do it out of an abundance of common sense anyway.
- _heimdall 3y agoRegulation doesn't have much teeth when banks are too big to fail and all deposits are insured. Fines related to breeching regulation often come years after the infractions started and never amount to the gains banks wanted in the meantime. In the end regulation amounts to a slap on the wrist and the feds just getting a piece of the pie. We don't necessarily need those regulations of the money isn't insured though. Banks should be deciding how much to keep on hand based on their own risk profile. If they make a bad bet and lose the bank folds, depositors get priority on asset liquidation, and other banks take note.