Is there some kind of bank account transfer of one lump sum or physical cash or something else?
In: Economics
Bank transfers work the same way with totals of billions of dollars as with totals of just a few cents. It is just a number. How many zeros it have does not play a huge role. So a bank transfer would work out just fine. The problem you imagine is not with individual bank transfers but the banks will lump together all bank transfers between them. They do regularly exchange this debt between each other to keep the sums low. On average there is as much money going into a bank as out of a bank. The problems is when there is an unbalance in the money transfers between banks. And when a bank owes another bank hundreds of billions of dollars over a year or two it is probably for the best if they settle their debt. They can agree on how to do it however they want. The easiest is if they both have debt in the same central bank they can just transfer the debt between themselves. Otherwise they do sometimes send trucks of cash, gold or bonds between each other to settle debt.
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