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> There’s no hard limits. They are ratios Ratios are limits! > Nothing is limited in quantity Of course it is. At a certain point, compliance will say you li
by JumpCrisscross 1mo ago
> There’s no hard limits. They are ratios
Ratios are limits!
> Nothing is limited in quantity
Of course it is. At a certain point, compliance will say you literally cannot issue loans of certain types because of capital or liquidity ratios. If compliance fails to do that, regulators come in and yell at everyone.
- neilwilson 1mo agoI make $100 of loans, that creates $100 of deposits which move around. The capital ratio is 20%. I sell $20 of capital in exchange for $20 of deposits which are deleted. And then I do the same tomorrow. All ratios met. No limit on loans.