A demonstrably solvent bank can rarely have a genuine liquidity crisis because it can borrow against its assets from investors, the interbank lending market, or the Fed's discount window; the 2008 crisis is described as an interbank lending breakdown driven by distrust of mortgage-related asset values.
causalpending
Speaker
Arnold KlingEvidence Quote
“if a bank is sort of demonstrably solvent it is very hard for it to actually have a liquidity crisis in my opinion because it can go out and borrow money from investors”
Created: 6/13/2026, 7:04:06 PM
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