5 ms·
Don't banks take deposits because they want to lend?
by rfjakob 8y ago
Don't banks take deposits because they want to lend?
- stephen_g 8y agoSure, it's fairly cheap liquidity, the more the better. But no bank ever stops lending because they don't "have enough" deposits, because there is nothing of the mechanics of lending that relies on having existing deposits. They just need to be 1) solvent and 2) within their capital adequacy requirements and leverage ratios.