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Re:FDIC Takes over Silicon Valley Bank by lxgr on Friday March 10, 2023 @04:46PM (#35101550)
And you think that the bank just keeps sitting on that cash until you withdraw it again, paying you interest in the meantime?
Re:FDIC Takes over Silicon Valley Bank by tylerhou on Friday March 10, 2023 @05:52PM (#35102393)
If they are sitting on excess cash, they can lower interest rates on deposits.

The point is that when banks receive deposits, in the short term, their assets/liabilities doesn’t change.

Re:FDIC Takes over Silicon Valley Bank by lxgr on Friday March 10, 2023 @06:03PM (#35102513)
Sure, but you don't get a useful model of a bank by only looking at the short term like this.

> The point is that when banks receive deposits, in the short term, their assets/liabilities doesn’t change.

They do change: Cash is a (risk-free, modulo safe storage) asset, the deposit is a liability. This has consequences for all kinds of metrics vital to the running of a bank.

Re:FDIC Takes over Silicon Valley Bank by incompatible on Friday March 10, 2023 @07:27PM (#35103430)
Correct, although if they don't do something to make money with the cash they take in as deposits, they won't have sufficient income to cover their expenses, let alone make a profit.
Re:FDIC Takes over Silicon Valley Bank by dragonwriter on Friday March 10, 2023 @07:10PM (#35103242)
The effecf of the deposit is separate from the effects of decisions the bank makes after the deposit.

The deposit creates a cash asset and an equal liability for the increases account balance.

Other transactions have other effects.