[Xk]

> don't disagree with most of what you said, but...you sure about this part?

Yes. I am sure. I have far, far, far less than 0.000001% of the total money in the bank. If they could not produce this much money when I wanted it, there would be other serious problems.

> Or if you want a more practical example, keep watching Greece

If I was in Greece, I would not have my money in one of their banks.

[white_devil]

> Yes. I am sure. I have far, far, far less than 0.000001% of the total money in the bank. If they could not produce this much money when I wanted it, there would be other serious problems.

Last year, a branch office of a large bank in Finland was barely able to produce 10 000 euros in cash when I wanted to withdraw it.

The clerk just didn't realize he shouldn't mention it.

Don't be so sure.

[hobolobo]

Is that a case of the bank not having the money or just that branch not having the cash on hand?

[white_devil]

Each branch is supposed to function as a bank, right?

[burgerbrain]

Why in the world should a single branch be expected to hold that kind of cash for withdrawn without notice? There is a* huge* difference between "having the money" and "having the money in cash form on location".

[hobolobo]

They're not autonomous though - individual branches don't hold the value of all their customers' accounts as cash. You're subject to a daily limit (though you can take more if you give them notice).

[white_devil]

Now we're just being pedantic. My point was that each branch should have enough cash to act as a "proper bank", whatever amount of money you'd reasonably expect one to have in its vault.

But I'd sure expect more than 10k euro.

[burgerbrain]

If they barely had 10k in their vault, then it logically follows that they almost never need that much (otherwise they would obviously make it a point to keep more). If they rarely need that much, then it logically follows that somewhere at or less than 10k is a reasonable amount to have. There is no sense in taking the increased liability of having more if they don't need to.

Furthermore, acting as a "proper bank" means they do a lot more than just acting as your personal piggy-bank/mattress. If they have all their money tied up in cash, it means they can't actually be preforming real bank activities (investment).

[latch]

I thought we were talking within the context of "serious problems". As for greece, well..it happened to Washington Mutual in 2008 - the largest savings in loan institution in the US. Of course, this is only one of many US banks which were not able to produce money when it was wanted in 2008.

There's a reason banks have a legal right to refuse a withdrawal, specifically because they may not have enough funds. That reason is: because it has and will happen.

[tedunangst]

I had my "life savings" in WaMu. Now it's in Chase. I didn't lose a penny. At no point was I unable to withdraw my money.

What happened with Washington Mutual is not what's going to happen if there's a run on Mt Gox.

[latch]

There are stories (see consumerist.com) of cash withdrawals not being possible.

I admit I got a little off track though. My parent specifically stated withdraw money when he wants. There's plenty of evidence that at the peak of the crisis, some people had problems. But I agree, it seemed to have been few, and in the context of Mt Gox, it isn't really relevant.

[harshpotatoes]

I don't know of a single person unable to withdraw their money from WaMu as it went under. All of WaMu's accounts were then passed on to chase, and chase honord them. If WaMu went under, the savings accounts would have been FDIC insured. None of that will happen if Mt Gox is compromised in some catastrophic way.