Chapter
Controversy Around Banks Investing in Illiquid Securities
53:30 - 56:24 (02:54)
The controversy around banks investing in illiquid securities arises due to the risks involved, especially when they hold short term deposits. While some argue that banks can still make money by underwriting insurance and loans for the right interest rates, allowing them to invest in securities without full liquidity is a subject of debate.
Clips
The podcast discusses the controversy surrounding banks investing in securities that are not fully liquid and are risky, which could lead to failures like those experienced in the 1920s.
53:30 - 55:30 (01:59)
Summary
The podcast discusses the controversy surrounding banks investing in securities that are not fully liquid and are risky, which could lead to failures like those experienced in the 1920s.
ChapterControversy Around Banks Investing in Illiquid Securities
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PodcastAll-In with Chamath, Jason, Sacks & Friedberg
The banking industry has different tiers of regulatory capital and rules to follow regarding ratios and liquidity when investing in non-liquid assets.
55:30 - 56:24 (00:54)
Summary
The banking industry has different tiers of regulatory capital and rules to follow regarding ratios and liquidity when investing in non-liquid assets. Non-liquid assets, such as securities and loans, should be packaged and sold as securities if the bank cannot mark them to market on a daily basis.