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[Nickbat]

but it would be YOUR money and available on demand in cash.

Is that option not open to me at the moment?

Finally, irrespective of whether or not deposits were held in cash, should sufficient people want to withdraw their funds, as a group, at any given time, would this not produce essentially the same result as a run on the bank?

That's the thing Zulu. Even our previous Chancellor referred to our deposits as banks' assets. They're not, they're banks' liabilities.

You couldn't have a run on a bank if all customer deposits (unless lent by prior agreement) were physically backed by cash at a central banking depository. Customers couldn't withdraw more than they had put in. If everyone withdrew their money, so the theory goes, banks would merely be losing their liabilities, not their assets. 

 

[Dishevelled Den]

but it would be YOUR money and available on demand in cash.

Is that option not open to me at the moment?

Finally, irrespective of whether or not deposits were held in cash, should sufficient people want to withdraw their funds, as a group, at any given time, would this not produce essentially the same result as a run on the bank?

That's the thing Zulu. Even our previous Chancellor referred to our deposits as banks' assets. They're not, they're banks' liabilities.

You couldn't have a run on a bank if all customer deposits (unless lent by prior agreement) were physically backed by cash at a central banking depository. Customers couldn't withdraw more than they had put in. If everyone withdrew their money, so the theory goes, banks would merely be losing their liabilities, not their assets. 

 

Thanks Nick I'm prepared to be educated in this matter but I fear that the financial institutions as presently constituted hold all the cards.