What Are Banks For?

[Sapiens]

;)

[Sapiens]

Re: What Are Banks For?

Coming soon:

Sapiens' Honorable Intl. Bank

At your service for:

Bank Guarantees (BG's)
Bonds
Cash Deposits / Certificate of Deposits (CD's)
Letters of Credits (LC)
Standby Letter of Credit (SBLC)
Medium Term Notes (MTN)
Bank Promissory Notes (BPN/PNs)
Safe Keeping Receipts of precious assets (SKR)

Kidding...

[ThePythonicCow]

Re: What Are Banks For?

I found the first two-thirds of that video clip to be word games and paradoxes unnecessarily obfuscating double entry bookkeeping assets and debits. I

For instance, if I deposit $100 in a bank savings account, that deposit generates both an asset and a liability of the bank. That's the usual case with double entry bookkeeping; entries come in pairs. In the case of that deposit, the $100 that I handed the teller is now an asset of the bank, and the $100 commitment they just incured to return that money to me sometime in the future is a liability of the bank.

[ricket]

Re: What Are Banks For?

I found the first two-thirds of that video clip to be word games and paradoxes unnecessarily obfuscating double entry bookkeeping assets and debits. I

For instance, if I deposit $100 in a bank savings account, that deposit generates both an asset and a liability of the bank. That's the usual case with double entry bookkeeping; entries come in pairs. In the case of that deposit, the $100 that I handed the teller is now an asset of the bank, and the $100 commitment they just incured to return that money to me sometime in the future is a liability of the bank.

And the argument that summarily followed was why the customer didnt get to earn interest on that transaction? Since the bank never really had the money to begin with, why do the banks get to keep all the profits from lending the money?