It’s cash, until the bank converts it to something else. For example a loan. Yes... | Hacker News

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		mbreese on March 10, 2023 \| parent \| context \| favorite \| on: FDIC Takes over Silicon Valley Bank It’s cash, until the bank converts it to something else. For example a loan. Yes, it is initially cash. But if the bank wants to make any money, it needs to convert that cash into some other vehicle for generating interest.

rkagerer on March 10, 2023 [–]

One way to generate interest is to simply park it at the Fed. Check out The Narrow Bank for the story of an upstart that wanted to make that their whole business model.

https://johnhcochrane.blogspot.com/2018/09/fed-nixes-narrow-...

prottog on March 11, 2023 | [–]

Thank you for this! Very interesting.

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