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A comment on FDIC Takes over Silicon Valley Bank. Parent comment

Re:FDIC Takes over Silicon Valley Bank by kgwgk on Friday March 10, 2023 @04:51PM (#35101624)
> Fractional reserve banking is a model of how banking works but it's a wrong model. [...] They try to attract deposits from other banks because they need enough bank reserves

Not completely wrong, after all.

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Re:FDIC Takes over Silicon Valley Bank by mempko on Friday March 10, 2023 @08:43PM (#35104184)
It's a useful model the same way a toy hotwheel is a model of a car. Yes they both have four wheels.

Notice the issue that SVB had was a huge influx of deposits and not enough loans.

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Re:FDIC Takes over Silicon Valley Bank by mempko on Monday March 13, 2023 @10:57AM (#35136565)
Ultimately it's the capital that the banks have that limit how much they can lend, not reserves. Their capital requirements are the limit. Once capital falls below a certain percentage, the bank is in trouble.
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