Money is just green pieces of paper. It's a liability in the sense that it's losing value to inflation sitting in a vault doing nothing.
However, the Fed used to mandate banks keeping a 10% reserve requirement (hence the term "fractional reserve banking") to mitigate bank runs. It's essentially the banking version of an emergency fund; you're not supposed to invest or profit from insurance.
(As an aside, the number of dipshits I see wanting to invest their e-fund pre-2022 so they "don't lose to inflation" was too damn high.)
But then the Fed dropped the reserve requirement in March 26, 2020 in the guise of Doing Something™ during the manufactured COVID pandemic and lockdowns. Now they're surprised_pikachu.jpg at the unintended consequences and moral hazard of yet another government-created problem.
They are considered a liability to withdraw when the money is leveraged towards loans. If they money isn’t lent out, then why does it matter?
From the perspective of fractional reserve banking, didn’t chase just increase their loan capacity by $92B/0.xx percent?
Money is just green pieces of paper. It's a liability in the sense that it's losing value to inflation sitting in a vault doing nothing.
However, the Fed used to mandate banks keeping a 10% reserve requirement (hence the term "fractional reserve banking") to mitigate bank runs. It's essentially the banking version of an emergency fund; you're not supposed to invest or profit from insurance.
(As an aside, the number of dipshits I see wanting to invest their e-fund pre-2022 so they "don't lose to inflation" was too damn high.)
But then the Fed dropped the reserve requirement in March 26, 2020 in the guise of Doing Something™ during the manufactured COVID pandemic and lockdowns. Now they're surprised_pikachu.jpg at the unintended consequences and moral hazard of yet another government-created problem.