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Ask HN: Are there banks/crypto companies immune to bank run?

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Re: Ask HN: Are there banks/crypto companies immune to bank run?

#41

Post by notahacker »

jejeyyy77 wrote: post #22
giantg2 wrote: post #6

Most people are well under the insurance limit and would rather bank for free than pay fees.

I'd argue that most people simply don't know what is going on and think that their money is being stored in a bank vault.

tbf, this group have a better handle on how things work than the people who live in existential fear of bank runs because they're oblivious to the fact that a solvent bank can always borrow enough money to fulfil withdrawal requests (with FDIC kicking in only when the bank is insolvent)

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#42

Post by jejeyyy77 »

notahacker wrote: post #41
jejeyyy77 wrote: post #22

Earlier quoted context omitted.

I'd argue that most people simply don't know what is going on and think that their money is being stored in a bank vault.

tbf, this group have a better handle on how things work than the people who live in existential fear of bank runs because they're oblivious to the fact that a solvent bank can always borrow enough money to fulfil withdrawal requests (with FDIC kicking in only when the bank is insolvent)

Remains to be seen IMO - esp. in the age of social media.

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#43

Post by notahacker »

jejeyyy77 wrote: post #42
notahacker wrote: post #41

Earlier quoted context omitted.

tbf, this group have a better handle on how things work than the people who live in existential fear of bank runs because they're oblivious to the fact that a solvent bank can always borrow enough money to fulfil withdrawal requests (with FDIC kicking in only when the bank is insolvent)

Remains to be seen IMO - esp. in the age of social media.

Social media has nothing to do with the fact a solvent bank can borrow enough to offset its entire loan portfolio

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#44

Post by adultorata »

You may be interested in the SPOT cryptocurrency, it's design claims to be 'an inflation-resistant store of value that features responsible protocol design choices. It is a freely redeemable, on-chain, stable asset that can safely wind down to zero users under stress without interventional bailouts'

spot.cash

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#45

Post by roflyear »

hd95489 wrote: post #40
roflyear wrote: post #37

Earlier quoted context omitted.

Who is going to issue mortgages, if not banks?

Banks only do community and jumbo in the us. Most mortgages are owned by the federal government

The federal government originates mortgages? TIL

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#46

Post by alxmng »

roflyear wrote: post #37
alxmng wrote: post #35

Earlier quoted context omitted.

The majority of business capitalization isn’t a loan, but invested savings in return for equity. All of venture capital, the stock market, small business using their own funds, etc. Mortgages are collateralized, and business loans can be secured with assets or equity. I suspect the majority of bank loans are mortgages (?). Interest rates do not need to be high without fractional banking, since loans can be secured.

Who is going to issue mortgages, if not banks?

Banks can issue mortgages without fractional banking… Investors pool capital and start a bank. The bank loans money for homes and makes a profit from interest.

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#47

Post by alxmng »

roflyear wrote: post #45
hd95489 wrote: post #40

Earlier quoted context omitted.

Banks only do community and jumbo in the us. Most mortgages are owned by the federal government

The federal government originates mortgages? TIL

Apparently the Fed owns 1/3 of all mortgage bonds.

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#48

Post by alxmng »

alxmng wrote: post #47
roflyear wrote: post #45

Earlier quoted context omitted.

The federal government originates mortgages? TIL

Apparently the Fed owns 1/3 of all mortgage bonds.

https://mishtalk.com/economics/the-fed-now-owns-nearly-one-t...

… and ~25% of the Feds entire balance sheet is mortgage securities.

Re: Ask HN: Are there banks/crypto companies immune to bank run?

#49

Post by kolinko »

przeor wrote: post #10
armchairhacker wrote: post #8

Earlier quoted context omitted.

IIRC government bonds are the "safest" option. Because the only way you lose them is if the US government collapses; and even if you think this could happen, if the US government does collapse, you have much bigger issues and also can expect every other currency to collapse as well (including Bitcoin/crypto, because most people will simply not accept it)

How come, maybe they just stop printing new dollars when the govt collapse? USD can exsist without govt. It can't exsist without army behind the paper , at least on paper.

There were multiple cases in history when governments failed, I think their currencies never survived this. Hyperinflation in such situations tends to devalue money so much that it's not worth the paper it's printed on.
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