> Is this not exactly why banks have to deposit X amount outside their doors?
Sorry, what do you mean?
Basically, the historical origins of different bank regulations are quite complicated and also differ from place to place, and they were often put in place by (political) coalitions of people who already had not one single motivation but a whole spectrum of them.
And then in addition to historical reasons, you also need to ask why things are still in place. Inertia is one answer, but it's not the only one.
I think the person is most likely talking about minimum capital requirements (which are not a “deposit outside of their doors”) and doesn’t quite understand the system.
To understand the regulatory framework for banks, the best place to start is the BIS and Basel III. https://www.bis.org/committees/bcbs/standards
Generally speaking, international banks follow Basel III in addition to their domestic regulators’ capital requirements (which are probably also derived from Basel III, but have differences just to make things tedious).
Help us out. Is this not exactly why banks have to deposit X amount outside their doors?
> Is this not exactly why banks have to deposit X amount outside their doors?
Sorry, what do you mean?
Basically, the historical origins of different bank regulations are quite complicated and also differ from place to place, and they were often put in place by (political) coalitions of people who already had not one single motivation but a whole spectrum of them.
And then in addition to historical reasons, you also need to ask why things are still in place. Inertia is one answer, but it's not the only one.
I think the person is most likely talking about minimum capital requirements (which are not a “deposit outside of their doors”) and doesn’t quite understand the system.
To understand the regulatory framework for banks, the best place to start is the BIS and Basel III. https://www.bis.org/committees/bcbs/standards Generally speaking, international banks follow Basel III in addition to their domestic regulators’ capital requirements (which are probably also derived from Basel III, but have differences just to make things tedious).
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> Is this not exactly why banks have to deposit X amount outside their doors?
Sorry, what do you mean?
-- think that's referring to bank deposit insurance schemes...
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Where did you get this idea?