4 ms·
I thought insolvency was when you didnt have the current assets to pay currently due liabilities? A 30 year note for $1M doesnt have to be paid right now. But i
by maerF0x0 4y ago
I thought insolvency was when you didnt have the current assets to pay currently due liabilities? A 30 year note for $1M doesnt have to be paid right now. But it's ~$4000 per month interest does. So you can have $4k in cash assets and $1M in debt and still be solvent (for now).
- legitster 4y agoI think this is why insolvency is bit opaque for banks. Literally any bank will be insolvent if everyone wants their money out at the same time. So you have to be pretty clever about how you estimate the risk of insolvency.