[pcthrowaway]

Is a bank a ponzi scheme if its assets don't exist also?

Like if a bank has $10B in customer deposits and one of their armored truck drivers escapes across the border with $2B, then some customers can't be paid back when they try to withdraw, does that make it a ponzi?

[re-thc]

If you can't be paid at all it's not a Ponzi. The point is to rely on newer funds to pay the older requests.

[selestify]

Banks also rely on “newer funds” (from loan payments) to pay “older requests” (customers withdrawing their deposits). When withdrawals from old requests rise so much that they can’t be covered by new funds, banks collapse.

[basch]

Not just to pay old requests. To pay revenue sharing / dividends / interest to shareholders. A Ponzi scheme is repurposing inflows to appear as revenue to a fake business.