
Hello, everyone. As I am reading the HBR book How Finance Works, there is a section that says, “Nearly every financial crisis begins with questions about asset quality, which lead to outflows of deposits, which must be funded with rapid sales of loans by the banks, which lead to declining loan prices, which lead to an uncontrollable cycle that can result in their destruction."I simply want to clarify and seek an explanation for this. How is the rapid sale of loans used to fund the outflow of deposits? In this case, if people withdraw their deposits, money will leave the bank; if the bank also allows people to loan money, money will leave the bank as well; and the loan will not be paid anytime soon. see hubwealthy.com/wealthy






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