Banks, like any business, never run out of money. They run out of investor trust. That’s why the only capital requirement for banks should be no capital requirement. They only succeed insofar as they force banks to sideline funds they’ve rented, and at a cost. To then pretend that any cushion would be sufficient if a bank ran into serious trouble is just silly.
Read the full article at Forbes.
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John Tamny is Founder and President of the Parkview Institute, editor of RealClearMarkets, senior fellow at the Market Institute, and Senior Economic Adviser to mutual fund firm Applied Finance Group. Tamny is the author of eight books. His latest is The Deficit Delusion: Why Everything Left, Right and Supply-Side Tell You About the National Debt Is Wrong. His others are Bringing Adam Smith Into the American Home: A Case Against Home Ownership, The Money Confusion, When Politicians Panicked: The New Coronavirus, Expert Opinion, and a Tragic Lapse of Reason, Popular Economics, Who Needs the Fed?, The End of Work, and They're Both Wrong: A Policy Guide for America's Frustrated Independent Thinkers.
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