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Re:Too Hot for TED: Income Inequality by Tycho on Thursday May 17, 2012 @02:36PM (#3988397)
So arguably investment activity can merrily continue with low capital ratios at the banks (assuming they can effectively manage the securitisation of loans and/or the market stays hungry for them), but what happens when you reach an economic crisis? Such as in Greece right now where there are runs on banks. That's where having more deposits helps and where the potential downside is catastrophic rather than merely non-optimal.

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