What they're doing, and what they don't want to say out loud for anyone to hear is, they're shoring up their reserve ratios, because they are EXPECTING further loan defaults in the next year or so. We haven't seen the end of the mortgage crisis. LOT'S of mortgage resets are getting ready to happen again. And when that happens, if the banks don't have funds in their reserves, those banks will have no choice but to collapse.
It's scary. And I, in no way, shape, or form, advocate this, but the threat of the bank run MUST be preeminent in their minds. And the only REAL solution to this problem of bank runs ISN'T to just stick their finger in the dike, but to ELIMINATE FRACTIONAL RESERVE BANKING!
But you'll NEVER get a banker to admit this... NEVER.
What they're doing, and what they don't want to say out loud for anyone to hear is, they're shoring up their reserve ratios, because they are EXPECTING further loan defaults in the next year or so. We haven't seen the end of the mortgage crisis. LOT'S of mortgage resets are getting ready to happen again. And when that happens, if the banks don't have funds in their reserves, those banks will have no choice but to collapse.
ReplyDeleteIt's scary. And I, in no way, shape, or form, advocate this, but the threat of the bank run MUST be preeminent in their minds. And the only REAL solution to this problem of bank runs ISN'T to just stick their finger in the dike, but to ELIMINATE FRACTIONAL RESERVE BANKING!
But you'll NEVER get a banker to admit this... NEVER.