Topic: World Banks have liability for debts liability and government (Read 86 times)

Probably OP has a very feeble idea on how debt and bank works and that's how this question came from him! Today's economy is a debt based economy unlike the old Gold backed economy. So if a country lends out money to other countries, it is considered as a assets for the lending countries and liability for the borrowing country. The same principle applies to the commercial banks as well! So if a bank has a healthy ratio of debts against their current deposits, they are good!

Secondly, a country never prints money to bail out banks! If a country has to print money to bail out banks, then either its economy has crashed like Venezuela or that's the only bank in the entire country like North Korea! Money printing is basically a hoax spread by bitcoin puritans! It usually doesn't happen as per government's will. We have a prime example of such malpractice - Venezuela!

Thirdly, World Bank is not a banker for Banks. So they don't lend money to commercial banks. They lend money to government based on the tax inflow and income!

In a nutshell, governments don't print money to bail out banks, they do it from their treasury. World Bank lends money to Government and not to commercial banks. The economy is a debt based economy so the healthier their debt book is, the better!

You are comparing it with printing more money and those two are different. Interest rates would increase and that will make a country poorer if they can't pay out their debts. Banks that can borrow in the world bank are with the blessing of the government.

No bailing will happen. It's hard to see them that they'll bail out the debts that has gone through their cash flow. There's accounting and it would affect their budgeting if the government will just bail them but it's unlikely that they will.

No, they won't file bankruptcy unless they're totally gone zero. That's not enough reason for them to be considered as a bankrupted bank.

It's for the world bank to decide. It's where most of the countries are indebted to. There were countries that have old debts and still they're not bailing it.

A government won't allow that to happen, a government collapsing themselves? no, it won't happen.

There's a certain process for paying debt in the world bank. They have due date/deadline for those companies or banks that has debt on them.

So world Commercial banks have liability... I guess so and all the Commercial Banks are in huge debt so they own debt to world Central banks and fed.

If they borrow more money without paying first debt the money will be like toilet paper right?

The only way If the government will bail out them right?  Will the governments will so that?

And If the government dont do that then its very logical that all Commercial banks need to declare bankcrupcy....

Now im thinking that fed talking about printing more money and lending to commercial banks
but the old debt huge ammount of debt is not served?  

and to be very honest If the governments all around the world will bail out banks the governments will broke 100%...

So the debtors who own debt are the Commercial banks now im thinking are they gona ask governments help?  Or they gona just declare the business closesure as banks?

Or they gona cover the debt with depositors money?