How Banks Work and Is Crypto a Scam? with Chris Aliotta - Episode 290

Chris Aliotta and Ken Greene discuss banking complexities, including the carry trade, fractional banking, and cryptocurrencies. Chris, with his extensive banking experience, explains that deposits are considered liabilities for banks and details the strategies banks employ to keep money perpetually earning interest. He also elaborates on the industry's risk issues concerning interest rates and liquidity. Chris shares about the Silicon Valley Bank's significant losses due to their failure in hedging interest rate risks, advises spreading money over several institutions for security purposes and explains an inverted yield curve's ramifications. 

 

Links and Resources from this Episode

DISCLAIMER For resources and additional information of this episode go to http://engineeroffinance.com Connect with Ken Greene http://engineeroffinance.com Office 775-624-8839 https://www.linkedin.com/in/ken-greene https://business.facebook.com/GreeneFinance Connect with Chris Aliotta https://www.linkedin.com/in/christopheraliotta https://www.quantalytix.com/team/chris-aliotta 

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Episode Highlights

The differences between commercial banking and investment banking Role of the Federal Reserve in providing liquidity backup for banks Cases when banks become insolvent The concept of "liquidity risk" Silicon Valley Bank's large-scale interest rate exposure A good way to measure the safety of a bank as an individual depositor Short-term rates influence what banks can lend to each other The impact of short-term rates on the economy

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