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> How do you charge a bank that failed and doesn't have the money to pay its depositors money? At least in the most recent cases, they have the assets but not
by triceratops 3y ago
> How do you charge a bank that failed and doesn't have the money to pay its depositors money?
At least in the most recent cases, they have the assets but not the liquid cash.
> it was close to trivial to work with a vendor to spread the balance among 20 banks
Why can't banks offer a product like this themselves? Or do it automatically when an account balance grows too large? They could partner with other banks to do it.
- mlyle 3y ago> At least in the most recent cases, they have the assets but not the liquid cash. Yes, but those assets need to be sold for less money to pay current account holders. Or if you issue a loan based on receiving the value of the assets in a few years, you'll need to account for time value of money, which has the same effect. > Why can't banks offer a product like this themselves? Or do it automatically when an account balance grows too large? They could partner with other banks to do it. Many banks do. Comerica set us up with this product, but we had to ask-- because otherwise they'd rather have had all of our money. (And even though Comerica got equivalent amounts incoming, for various reasons brokered deposits are less desirable to a bank than direct accountholder deposits).