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I still don't understand what you're thinking of as assets vs liabilities for a bank. A bank's assets are any cash it has on hand, plus any loans it issued / bo
by yuliyp 3y ago
I still don't understand what you're thinking of as assets vs liabilities for a bank. A bank's assets are any cash it has on hand, plus any loans it issued / bonds it purchased (I think that's what you meant by investment assets?). A bank's liabilities are its deposits as well as any other money raised via bonds. It's not clear at all what you're referring to as "money from investors" as that could mean money the bank borrowed (so show up as liabilities) or it could mean money raised via sale of stock (which is not a liability, but shows up as owners equity).
- legitster 3y agoIt's hard to understand what the article itself is claiming - it isn't clear what they are citing, but I read it as the banks being underwater on their investments specifically. Which could be true but they still have capital reserves and equity. And also, as the report they actually cited points out, not all capital reserves are created equal. And it's the amount of uninsured deposits that predicts their risk of a bank flight.