As to blaming fractional reserve banking for bank busts....
...
I agree that if banks only lend shareholders' money then depositors would not be affected by bank busts.
So we had to go through 3x exchanges of you telling porkies before you finally admit that fractional reserve banking is the primary reason for both of these failures.
Similarly if banks were forbidden to charge interest then there would be no bank busts.
If fossil fuels were banned there would be no car deaths on the road.
Of course. Here we have your answer to the large swathe of startups and their employees who could find themselves without paychecks and jobs. You have to understand that you don't have your business anymore and you employees dont have your jobs because it has to be like this and as long as I can explain it all logically to you, you'll be fine with that.
Are anti usury fanatics right to blame bank busts on charging interest or should they blame deplorable risk management?
Firstly, you've already acknowledged (despite 3x rounds of lies) that there would be no bank bust without fractional reserve banking, remember? So mulling over whether it is the culprit or not seems like a poor use of everyone's time - having already found that it is.
As for risk management, the moment these banks invested in treasury bonds, risk management went out the window. Imagine investing in something where your central bank alchemists can tinker around with interest rates from one FOMC meeting to the next?
Powell said during the week he will speed up rate hikes if necessary - so I guess we can get to see what he breaks next.
The same fiat money gods that brought the reserve requirement down to ZERO three years ago. Is that what you're talking about when you refer to risk management going out the window?
A Federal reserve who denied a master account to Custodia Bank - which is a full reserve bank - on the basis that that same full reserve bank presents risks to the banking system (Cusodia is suing the Fed for its protectionism), then has its Vice-Chair for Supervision come out on Thursday speaking in the knowledge that Silvergate is toast and that SVB is in dire straits and stating that Fed-regulated banks are well protected from bank runs!!!!
In his testimony before Congress during the week, Powell said that the US will have real-time payments and settlement soon. How do you think the banking system is going to be protected from bank runs in a real time settlement environment, Duke?
But that's one for the future - in the meantime, lets recap. Brendan started this thread to feature as part of a long series of crypto doom threads. And yet, crypto has little to do with what's gone down here. Crypto isn't the reason why we're now faced with greater potential of further bank runs and the likelihood that a whole raft of startups are going to go bankrupt, with their employees losing their jobs. Rather than it being the 'look, crypto bad' thread that he thought it would be, the subject area of the thread is a clear demonstration of the deficiencies of the current system.