Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC

Re:Joint Statement by the Department of the Treasury, Federa... by peyton on Sunday March 12, 2023 @08:09PM (#35128607)

> The bank now has $100, and the customer has $0.

This is wrong.

Edit: I see. I think you’re missing the full accounting picture. When somebody moves $100 of petty cash into a bank, they don’t have $0. They have $100 of cash. The bank has an asset and a liability. Rinse and repeat with the bank and Fed transactions. There’s not an $80 treasury note anywhere because those aren’t MTM.

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Re:Joint Statement by the Department of the Treasury, Federa... by kypro on Sunday March 12, 2023 @08:27PM (#35128830)

It's a simplification, but I agree, it's not fully accurate.

I'm guessing what you're getting at here is that bank would technically have a $100 liability with the customer and $100 in cash on its balance sheet.

The point I was trying to make is that there's just $100 of spending power in this hypothetical economy.

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