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it's not unlimited. There's a regulated amount for which they're not allowed to go over (reserve requirement - which has since 2020 been set to zero), and they
by chii 3y ago
it's not unlimited. There's a regulated amount for which they're not allowed to go over (reserve requirement - which has since 2020 been set to zero), and they are required to have enough equity/capital (called capital requirements outlined here: https://docs.google.com/viewerng/viewer?url=https://www.federalreserve.gov/publications/files/large-bank-capital-requirements-20230727.pdf https://docs.google.com/viewerng/viewer?url=https://www.fede... )
If it is indeed true that a bank could just print unlimited loan notes, then why did Silicon Valley Bank collapse? Wouldn't it be possible to just print themselves out of their troubles?
- npoc 3y agoYou're missing the bigger picture too. Silicon Valley Bank didn't collapse - it was bailed out with unlimited money from the bigger banks. The only limitation the banking system faces is excuses to loan money (one of the reason long-standing wars that last for years are increasingly common - the banking system gets to fund both sides)
- chii 3y ago> it was bailed out with unlimited money from the bigger banks. tell that to the equity owners of the bank.
- npoc 3y agoThere's no such thing as equity ownership anymore. The banking system has seen to that by slowly changing the legislation in every country around the world. https://thegreattaking.com/read-online-or-download https://thegreattaking.com/read-online-or-download