Quote:
Originally Posted by McSpike
That's why banks come down if everyone wants to withdraw the money - the majority of the money is never in the bank actually. It's invested. To get it out they have to dump that little part of the investment they have and give you your money.
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Don't forget that if an investment loses money (like say, totally hypothetically, an investment in a movie that doesn't even come close to breaking even) it won't be possible for a bank to reconcile everyone's balances with liquid funds. At that point it's a little like a pyramid scheme: the early ones to cash out get the $, but the later ones are lucky to get cents in the dollar, if anything.
Of course if the funds have been frozen by an authority then it's more likely that everyone will receive xx% (where xx is less than 100% of their balance)