Apparently Spudda doesn’t understand banks

We don’t call bank deposit accounts ‘bank debt’. Nor do we say banks must do everything that they can to repay those deposit accounts as soon as they possibly can.

Actually, we do. As Matt Ridley would be happy to explain when someone asks him about Northern Rock. Deposit accounts* are debt repayable on demand. And if you, as a bank, don’t so repay when asked you’re bust. As, err, Northern Rock found out.

You can even be solvent but illiquid and go bust…….

*OK, there are some that aren’t, term deposits, but the vast majority are.

14 thoughts on “Apparently Spudda doesn’t understand banks”

  1. Dennis, CPA to the Gods

    Evidently Spud has never looked at a bank’s balance sheet.

    Par for the course.

    And this dipshit – who doesn’t know that a deposit account is a liability on a bank’s balance sheet – is going to reinvent accounting with “sustainable cost accounting”. Right.

  2. Well… even term deposits are the same…
    They just don’t have that “on demand” clause, so it gives a bank more wriggle room to use that money elsewhere for profit without having to have the liquidity for immediate payout for that particular bit of private investment.

    Banks collect drops of water to create lakes. Then use the lakes to breed fish for profit.
    Banks can even connect the lakes with canals to level the lakes, and even swap out fish, and even make people think it’s all about the fish…
    Which works well , until one idiot decides to breed sharks…..

  3. Dennis, The Freudian Slipper of Central Ohio

    Sam –

    That thread is beyond parody. And I think you’re right about the Messiah Complex. Then again, you try saving the world while battling hay fever induced headaches.

  4. Well, actually, when – on the rare occasions admittedly – I aid in proofing his articles it’s Matt.

    Could well be, properly, the Viscount Ridley to you of course.

  5. Gawd, recovery from Covid-19 only to be on death’s door with hayfever and headaches. The man is a hero. One can see how he is able to empathise with the victims of Dachau

  6. One of the first things they point out in basic Book keeping let alone accountancy training is that your bank statement is backwards as it’s their record of their accounts not your record.
    That was the case years ago now you most probably have to go through a lecture on the racism inherent in using the terms black and red to signify sign of balances

  7. He seems to be in some inversion of reality where his knowledge diminishes with time rather than increasing (a bit like Benjamin Button). Given that 2+2=4 seems to be a challenge for him now, it can’t be long before he’s gnawing on a teething ring and sucking a rusk.

  8. One of the first things they point out in basic Book keeping let alone accountancy training is that your bank statement is backwards as it’s their record of their accounts not your record.

    I expect he walked out of those in the first term, deeming them ridiculous.

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