DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Let's talk about the fractitional reserve banking system

**AndyPharmc** · 01-04-2012, 02:58 PM

Here is how I see it. I may not be perfectly accurate.

The bank is LICENSED to AUTHENTICATE Federal Reserve Notes. They are licensed and audited by their regional bank. If they fail the audit they are bankrupt. Just like any corporation a bank can lose its sanction to operate if their balance sheet is in the red. Yes, they can lose from loan defaults. They must account for the FRNs that they AUTHENTICATED in accordance with their LICENSE. The bank is a franchise of the federal reserve system.

I think this is an excellent explanation. The way I look at it (and I can't prove this), is that even though certain banks may 'fail' when too high of a percentage of their loans default, someone is benefitting from the asset aquisitions that accompany 'failed' loans. How? I'm not sure. Possible explanations= shell companies, payoffs/briberies, mergers or partial mergers, golden parachutes, et al in combinations or singularly among other gamuts. I guess what I'm saying is that these banks only pretend to fail.

dys

01-04-2012, 02:58 PM	#16
AndyPharmc Join Date Oct 2005 Posts 461 Senior Member	Here is how I see it. I may not be perfectly accurate. The bank is LICENSED to AUTHENTICATE Federal Reserve Notes. They are licensed and audited by their regional bank. If they fail the audit they are bankrupt. Just like any corporation a bank can lose its sanction to operate if their balance sheet is in the red. Yes, they can lose from loan defaults. They must account for the FRNs that they AUTHENTICATED in accordance with their LICENSE. The bank is a franchise of the federal reserve system. I think this is an excellent explanation. The way I look at it (and I can't prove this), is that even though certain banks may 'fail' when too high of a percentage of their loans default, someone is benefitting from the asset aquisitions that accompany 'failed' loans. How? I'm not sure. Possible explanations= shell companies, payoffs/briberies, mergers or partial mergers, golden parachutes, et al in combinations or singularly among other gamuts. I guess what I'm saying is that these banks only pretend to fail. dys
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