The current banking concerns related to banks not taking ENOUGH risk -- i.e., by investing their reserves heavily in long-term T-bills at extremely low interest rates.
It means that the banks too unnecessary risks for profit. Banks are supposed to be conservative institutions, financially, where they don’t take much money out incase they have a bank run or something.
Instead of whatever historical ratio was considered a safe ratio between having money in the bank or loaned out or invested, the banks decided to have less money in the bank that the historical average. This puts them at risk for if too many people try to take money out.
I’m sure there is other reasons, but I’m only concerened with the one, because it directly affects if you can get your money back or not.
It means that the banks too unnecessary risks for profit. Banks are supposed to be conservative institutions, financially, where they don’t take much money out incase they have a bank run or something.
Instead of whatever historical ratio was considered a safe ratio between having money in the bank or loaned out or invested, the banks decided to have less money in the bank that the historical average. This puts them at risk for if too many people try to take money out.
I’m sure there is other reasons, but I’m only concerened with the one, because it directly affects if you can get your money back or not.
Banks are not supposed to take risks, like high interest investments because their jobs is to take your money and be in position to give your money on demand. It doesn’t mean they can’t take risks, but they are not supposed to take risks that means that you can’t get your money.