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Matt Levine

Don’t Put Your Valuables in the Bank

Also dermatologist-investors, activism data and fake trading.

Banks are places to store your money, but not really. Not literally. It’s not like you hand your money to the teller and they put it in a special envelope with your name on it, to be opened when you make a withdrawal. No, you give the bank money in exchange for a special sort of payable-on-demand debt obligation, and the bank mingles the money with other peoples’ money to fund loans, and of course really the loans create the deposits, etc. etc. etc., you know all this.

On the other hand if you have valuable stuff you can leave it with the bank, and the bank will keep it in a box for you, but that is sort of an accident. It is not a core banking function, not really a banking function at all except for historical reasons. And sometimes they’ll drill open the box and throw your stuff out!