I still have no idea what you’re talking about. Can you give me an example of an “unnecessary risk” in the banking industry? Up to this point I have see no evidence of systemic bank problems related to what would traditionally be considered high-risk investments.
Commercial real estate loans in large metropolitan areas. Since the covid scare, more companies are involved in working from someplace else than an office.
See post #40
I’m not sure how this is hard to understand.
People deposit money and they take money out. That’s the banks sole job. They have to ensure that people have money to do their business.
But banks have found, in doing business, that they don’t need 100% of deposits sitting in a vault, in case customers need. They have found that, normal day to day transactions, they only need a fraction of the money.
If a bank can’t pay out, because they have a surge in customers wanting their money, they have to close until they have refilled their vaults to continue to do business. They will either borrow from the Feds or another bank to do that. However, when that is no longer an option, they close.
I’m only pointing out that one of the reasons for bank runs is because the banks have chosen to leave less in the vault than what they are able to cover because of a surge of customers wanting their money.