if a bank has insufficient reserves they may do all of these? sell securities to...

if a bank has insufficient reserves they may do all of these? sell securities to other banks or to the public, borrow from other banks or from central bank and stop making new loans.?

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isaaq
3 months ago
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borrow from other banks or from central bank and stop making new loans.?
Banks go under when they are no longer able to meet their obligations. The bank might lose too much on investments, or the bank may be unable to provide cash when depositors demand it (see below).

Ultimately failures happen because banks don't just keep your money in vaults. When you walk in and deposit cash (or deposit funds electronically), the bank invests that money. A simple form of investment is making loans to other bank customers so they can earn interest — and pay you interest on your deposits.

Banks also invest in much more complicated ways. If the bank takes large losses in any one area, it risks failing.
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