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A comment on FTX Tapped into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall. Parent comment
No bank starts out with $0 capitalisation and then makes up money along the way. This has never happened.
> Commercial banks all agree with each other that they accept each other's demand deposit accounts as a form of money.
This is not true either. If a bank is known to have no capital, other banks will refuse to accept transfers from it without immediate settlement.
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No bank starts out with $0 capitalisation and then makes up money along the way. This has never happened.
> Commercial banks all agree with each other that they accept each other's demand deposit accounts as a form of money.
This is not true either. If a bank is known to have no capital, other banks will refuse to accept transfers from it without immediate settlement.