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Message
re: Great Idea To Stop These Bank Runs Going Forward
Posted on 4/30/23 at 2:02 am to Tarps99
Posted on 4/30/23 at 2:02 am to Tarps99
quote:
So there is already a mechanism for insuring the losses, backed by the Federal Reserve, ie the Federal Government.
There is not one bank in the US that can sustain a "bank run". Not one.
Deposits are liabilities to the bank. They must invest those funds in order to remain solvent. The unique issue that caused this problem was that they had an unusually high percentage of the deposits that would not be insured (over the 250k limit) and they had invested with the strategy of low interest rates which the fed had maintained for a very long period of time. When the fed begain raisin the rates rapidly, their strategies had become outdated and they did not have the liquidity needed. Then the run happened, and there was nothing they could do at that point.
1
Posted on 4/30/23 at 8:58 am to HorseShoeHenry
quote:
When the fed begain raisin the rates rapidly, their strategies had become outdated and they did not have the liquidity needed.
Was their inability of changing strategies quick enough not deserving of some blame, leading to not having the liquidity needed?
Instead of having a strategy team focused on changing with the tide, they were focused on ESG Woke stuff.
We really have a problem with the Govt forcing traditional institutions of our capitalistic foundation to focus on stuff that don't mesh. Banks, stock market, etc arent focusing on what we all have known and been taught and it's throwing a wrench inti the spokes.
This post was edited on 4/30/23 at 9:00 am
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