Paul Krugman

@paulkrugman ↗

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Last Checked April 3, 2023

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Sat Mar 11 11:01:22 +0000 2023

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Paul Krugman @paulkrugman

Conventional banks make money in part because they know something about/have special relationships with their borrowers. They lend money to businesses and consumers, at above market rates bc there's default risk, which they think they can manage. 6/ — PolitiTweet.org

Posted March 11, 2023

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Paul Krugman @paulkrugman

There were two problems with this business model. First, the bank attracted big accounts, far larger than the 250K insured by the FDIC, making it vulnerable to a classic bank run. Second, it didn't really have any expertise in putting that money to work 5/ — PolitiTweet.org

Posted March 11, 2023

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Paul Krugman @paulkrugman

Conventional banks also earn money from credit card balances, which is similar but even more so, with a lot of inertia in the customer base 7/ — PolitiTweet.org

Posted March 11, 2023