Deposits will flow back into Greek banks.

But structured deposits for example, deposits whose rate of return is linked to the performance of the New York Stock Exchange are becoming increasingly popular.

Deposits in the branches of American banks in Buenos Aires were to be as safe as deposits in Miami.

Treasury reformers have shirked the challenge of working out the implications of this crucial insight.

That generally transfers the deposits from the lending bank to another bank.

This is also partly why the Greek economy is affected by the tax on deposits.

Third, the technical features of the market will ensure strong demand for US Treasury bills.

The authorities may hope that their plan to insure bank deposits will shift deposits from the three largest banks to many smaller banks around the country, facilitating local startups access to financing.

He parks this 10 million in Treasury bills, too, and sells another 10 million options.

Between 1943 and 1945, State Treasury Bills for 1000 and 5000 leva were issued.

The Chinese authorities do it today, and they also set the minimum deposits banks must maintain with the central bank.

China is worried that its more than 1 trillion investment in US Treasury securities will not hold its value.

Or the deposits can be consumer paper issued by KKR Atlantic Financing, and the loans can be CDO sub prime mortgage tranches that KKR Atlantic holds in its portfolio.

Bank subsidiaries will increasingly have to finance local lending with local deposits and other local funding.

The deposits can be individuals paychecks and the loans can be to small businesses.

Who wants to build up debt if there might be a financial crisis around the corner? Better to keep socking away US Treasury bills, even if the return is far lower than on most other investments.

Better to keep socking away US Treasury bills, even if the return is far lower than on most other investments.

Indeed, the worsening banking crisis, with deposits fleeing from the eurozone periphery, is further strangling Europe s growth prospects.

When banks make loans, they create deposits for borrowers, who draw on these funds to make purchases.

That scare was contained when the G 7 committed to increase guarantees of bank deposits and to backstop the financial system.

The logic behind the separation was absolutely clear banks whose deposits were insured by the taxpayers should not be allowed to speculate with their depositors money.

The second price spike occurred when Lehman Brothers collapsed, leaving investors scared about the safety of their financial assets including bank deposits.

In 1980, financial assets stocks, bonds, and bank deposits totaled around 100 of GDP in the advanced economies.

Icelandic banks, for example, took deposits in the United Kingdom and the Netherlands, and swept them back to Reykjavik, leaving the host countries out of pocket.

This is important because the US might oppose any plan that undermines demand for Treasury bills (and thus its guaranteed access to low cost financing).

Even if poor countries were willing to guarantee their deposits, the guarantee would mean less than that from the United States.

The member state would then be legally obliged to make deposits into that account to cover the ECB bonds coupons and principal.

Investing in US Treasuries, after all, was a sure loss maker, given the gap between their modest yield and the steady appreciation of the yuan.

Spanish banks are required to increase their deposits in proportion to their lending and set aside capital against assets in their off balance sheets.

Many small savers place their savings in so called money market funds that pay a premium over ordinary federally insured deposits.

If savers in Portuguese banks start moving their money to Germany, the ECB will recycle these euros back to Portugal through interbank deposits.

Or the deposits can be investments in D.E. Shaw s funds and the loans can be the complex derivatives that make up D.E. Shaw s portfolio.

The commercial banks could sell Treasury bills and longer term bonds to the Fed, receive reserves in exchange, and earn a small but very safe return on those reserves.

There was a time when privatization allowing individuals to set up individual savings accounts seemed better than Social Security, which invests in lower yielding Treasury bills.

The inequities are obvious.

The IMF would use those deposits to finance its lending operations, rather than having to rely on quota allocations or arrangements to borrow from members.

It is not just a matter of money India s central bank is rolling in cash, which it has mainly invested in low yield foreign treasury bills.

To increase commercial banks reserves, the Fed historically used open market operations, buying Treasury bills from them.

Because runs on banks can trigger widespread distress, governments explicitly guarantee insured deposits and implicitly guarantee all the other debts of mega banks.

My proposal is to use the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM) to insure the European Central Bank against the solvency risk on any newly issued Italian or Spanish treasury bills that it may buy from commercial banks. This would allow the European Banking Authority to treat these various T bills as the equivalent of cash, because they could be sold to the ECB at any time.

This would allow the European Banking Authority to treat these various T bills as the equivalent of cash, because they could be sold to the ECB at any time.

Remember that in America s Savings and Loan crisis of the late 1980 s, the government had to bail out those institutions, because their deposits were federally insured.

A large portion of these holdings are illiquid (total cash in hand and bank deposits combined for Nawaz Sharif and his wife are Rs 140 million) and constant industrial investments in Pakistan.

Fully two thirds of that total around 2 trillion is invested in dollar based assets, largely US Treasuries and agency securities (i.e., Fannie Mae and Freddie Mac).

The European Central Bank would never have allowed Cypriot banks to attract huge deposits by paying above market interest rates, and then to put all of their eggs in one basket (Greece).