Re:Salim Kara stole $2M in coins with a magnet and a car ant...
by reese_john on Tuesday January 02, 2024 @10:08AM
(#38842405)
> but to the bank a deposit is a liability not an asset
Deposits are an asset AND a liability
> This means banks in the modern sense can literally create money, so they don’t need your deposits
Not really. Banks still have to spend central banking money when doing interbank settlements, and deposits are an important source of funding to day-to-day operations.
Say you have an account within Chase and want to send money to your friend at JPMorgan, Chase can't simply "create dollars" - they need to have enough reserves in their Central Bank account.
Deposits are an asset AND a liability
> This means banks in the modern sense can literally create money, so they don’t need your deposits
Not really. Banks still have to spend central banking money when doing interbank settlements, and deposits are an important source of funding to day-to-day operations.
Say you have an account within Chase and want to send money to your friend at JPMorgan, Chase can't simply "create dollars" - they need to have enough reserves in their Central Bank account.