Originally Posted by
psyflyer
not necesseraily.
deposit is a liability only if its used as loan. Hence its a wash.
deposits for a bank that are not matched to a loan is known as an asset payable on command.
BTW, let me teach you something if you dont already know: you aware that the Federal Reserve is a private bank?
Lastly the FDIC has no authority to shut nobody. The OTS does.
1. Deposits are
always a liability for a bank. It's money the bank owes to someone (the depositor). So my original point was to say that the article is essentially correct when it described NTBK's balance sheet as having xxx in deposits and xxx in assets. The original poster didn't understand this.
2. I know all about the Fed. It is not a private bank. The Federal Reserve is a system and various components have differing legal states. The board of governors is actually a government agency. But yes, the Federal Reserve Banks are ultimately privately owned by the commercial banks in their respective regions, although these shareholders have limited abilities to control these stakes.
3. You are technically correct on OTS/FDIC but you realize they usually act in unison. And if FDIC refused to insure a bank's deposits going forward, this would effectively shutter any bank.