They should hold 100% of demand deposits in the vault?
“They should hold 100% of demand deposits in the vault?”
Did you read what I just posted? I didn’t say they necessarily had to cover their demand deposits. If they wanted to be sound, they would. If they wanted to offer 100% protection to their customers against bank runs, they would. But they’re in it to make money, and that’s their perogative. It doesn’t change the underlying fact, though.