Comparing Apples to Apples…..so let’s call it 200k deposit where you’ve exceeded the Irish government guarantee of 100k…and so now your effectively an unsecured creditor to IBKR or an Irish bank….I would sleep infinitely better being an unsecured creditor to IBKR than either AIB or BOI.
I’ve a post somewhere else on here about their soundness and ‘fortress’ balance sheet but short version IBKR keeps all its customer cash in short duration treasuries & partner banks such as JP Morgan. It does make margin loans to its brokerage customers so has an asset book….but these loans are collateralized by customers own stock and margin rules that are outrageously aggressive in terms of liquidations. Financial institutions usually die or get in trouble on the asset side of the b/s....First Republic / SVB are unusual in that in some way they got in trouble on the liability or deposit side....too many deposits that they couldn't resist turning into assets (LONG duration treasuries).
IBKR has very little of either.....folks have talked alot about the potential for what they call a narrow bank...a bank that doesnt lend and instead just transmits central bank overnight deposit rates back to consumers. They dont give out banking licenses for this purpose...and rightly so...but IBKR isnt a million miles away from a narrow bank that provides what must be the highest rate instant demand deposit account (for high balances) out there.
Wall St. for years has accused IBKR of being too conservative and running the business with what it considers to be excessive levels of capital i.e. they aren’t earning a high enough RoE cause they are holding on to too much capital for safety and prudence reasons. IBKR are my kind of company - they never want to be reliant on the kindness of strangers when things go south and such then I consider them one of the cockroaches of the financial system along with JP Morgan & Berkshire Hathaway.
Short version - IMO - if IBKR ever fails to deliver deposit cash back to its customers…the customers will be more worried about getting their hands on food and petrol and where money will not be the from of currency being used!
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