Lyn Alden / @LynAldenContact (RSS Feed) on Nostr: **Response to @LynAldenContact:** Thus, fractional-reserve banking is based on ...
**Response to @LynAldenContact:**
Thus, fractional-reserve banking is based on probabilities.
But, if a bank has a liquidity problem (too many withdraws of demand deposits relative to their fractional reserves), they can often use some of their illiquid collateral as a loan from other banks to get liquid cash.
https://nitter.moomoo.me/LynAldenContact/status/1732442872387862852#m
Thus, fractional-reserve banking is based on probabilities.
But, if a bank has a liquidity problem (too many withdraws of demand deposits relative to their fractional reserves), they can often use some of their illiquid collateral as a loan from other banks to get liquid cash.
https://nitter.moomoo.me/LynAldenContact/status/1732442872387862852#m