Why is cash considered a liability for banks?

Question

Curious. Trying to understand what’s happening with svb, and this concept does not click yet.

In: 1

Answer 1

When you deposit $100 at a bank, that is still your money. The bank owes you $100 whenever you want it. So for the bank, it represents a debt. Debts you owe are liabilities, debts owed to you are assets.