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From https://yarn.pranshum.com/banks https://yarn.pranshum.com/banks > Most banks hold more assets than deposits. So in theory, depositors should always be mad
by everybodyknows 4y ago
From https://yarn.pranshum.com/banks https://yarn.pranshum.com/banks
> Most banks hold more assets than deposits. So in theory, depositors should always be made whole.
No such theory is established; it's the central bank's money printing ability that can always make depositors whole. In the US, the Federal Reserve implicitly backs the Federal Deposit Insurance Corporation.
- wrvajklj4 4y agoI get that the money goes brrrr attitude, but it's kind of silly. The FDIC holds an adequate deposit insurance fund, financed by banks who must buy FDIC insurance. It's over $100 billion dollars, which is enough to weather some major failures. With large failures, the FDIC may issue special assessments to maintain the fund at a safe level (they did this with SVB).