Message:

<p>[QUOTE=&quot;medoraman, post: 1686025, member: 26302&quot;]But its not a loan per se. A loan is backed up with either assets or general business. A deposit is higher priority than that. Pragmatically they can appear the same if a bank fails, but legally they are not. If a bank failed, the order or priority would be depositors before most other people owed money. The exceptions would be employee payroll, payroll taxes, (Uncle Sam wants his before you get yours), then depositors. After them, THEN it would be loans, then equity.</p><p><br /></p><p>I see why you think that, but legally deposits are in a special class of assets. Think of it how banks began, and how they still have SDB&#039;s. You put something in, they hold it, and give it back to you when you want it. When they started allowing fractional banking, they allowed banks to pay YOU interest instead of them having to charge you money to hold your cash. However, its still a bailment arrangement, like your SDB. If your bank goes bankrupt, they cannot empty your SDB and sell the stuff to pay back loans, right? Theoretically, your cash deposits are SUPPOSED to be similar. But, if the regulators do their job poorly, sometimes the cash is just not there. Hence insurance.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in