Yes but when the banks lose 50% of their assets, such as several borrowers declaring bankruptcy or investments going underwater, they are in much worse condition.
It's at that point that the insolvency is exposed, sure. I'm just pointing out that the insolvency doesn't begin when the investments lose value, it was chosen the minute the bank chose to be fractional reserve.
Yes but when the banks lose 50% of their assets, such as several borrowers declaring bankruptcy or investments going underwater, they are in much worse condition.
It's at that point that the insolvency is exposed, sure. I'm just pointing out that the insolvency doesn't begin when the investments lose value, it was chosen the minute the bank chose to be fractional reserve.