> Depositors can be made whole without receiving little green pieces of paper.
However, in principal The bank promises redeemable cash, that's why people stay in banks. But it's a lie. Again bank runs exist because of this lie.
Everybody knows the Fed screws it all up. A wire transfer among competing banks would make the competing bank demand that the other bank redeem the transfer in green paper money.
However, because the Fed is the bank of banks, it just becomes number a change on the balance sheet of the fed.
However, in principal The bank promises redeemable cash, that's why people stay in banks. But it's a lie. Again bank runs exist because of this lie.
Everybody knows the Fed screws it all up. A wire transfer among competing banks would make the competing bank demand that the other bank redeem the transfer in green paper money.
However, because the Fed is the bank of banks, it just becomes number a change on the balance sheet of the fed.