Why does the fed and banks balance assets and liabilities but the treasury department doesn’t?

139 views

Why does the fed and banks balance assets and liabilities but the treasury department doesn’t?

In: 0

6 Answers

Anonymous 0 Comments

[deleted]

Anonymous 0 Comments

[deleted]

Anonymous 0 Comments

[deleted]

Anonymous 0 Comments

Banks, including the Fed, inherently are in the buisiness of holding money/assets for other people, most of “their assets” aren’t “theirs,” they belong to depositors putting their paychecks in their bank. If the bank doesn’t have more assets than liabilities, well they frankly can’t do business and probably will be subject to a bank run as depositors take their money out of the bank in fear that there won’t be any left.

The treasury on the other hand isn’t a bank, is not in this business, its job is to collect taxes and pay for things congress tells it to.

Anonymous 0 Comments

Banks, including the Fed, inherently are in the buisiness of holding money/assets for other people, most of “their assets” aren’t “theirs,” they belong to depositors putting their paychecks in their bank. If the bank doesn’t have more assets than liabilities, well they frankly can’t do business and probably will be subject to a bank run as depositors take their money out of the bank in fear that there won’t be any left.

The treasury on the other hand isn’t a bank, is not in this business, its job is to collect taxes and pay for things congress tells it to.

Anonymous 0 Comments

Banks, including the Fed, inherently are in the buisiness of holding money/assets for other people, most of “their assets” aren’t “theirs,” they belong to depositors putting their paychecks in their bank. If the bank doesn’t have more assets than liabilities, well they frankly can’t do business and probably will be subject to a bank run as depositors take their money out of the bank in fear that there won’t be any left.

The treasury on the other hand isn’t a bank, is not in this business, its job is to collect taxes and pay for things congress tells it to.