[dwild]

> with more or less liquid assets

What's more liquid than cash itself?

I also have an hard time it's backed with MORE value and whether that value is fictional or not. The 2008 crash has shown that it wasn't actually backed by much.

[beefield]

"Or less"

Any bank with assets worth less than liabilities is bankrupt. You may not believe it, but regulators that allow bank to operate and any one holding bank equity with stock price above zero believes that bank's assets are worth more than liabilities.

There you are right that it is possible that tje value of the bank's assets may decline fast, but normally the assets exceed deposits quite significantly as deposits are amongst the highest priorities, so other liabilities (senior debt and equity) act as buffers as well.

[beefield]

Of course, when I say liabilities, I mean non-equity.