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It’s not the only factor. They’re also additionally known to “overinsure” collateral, meaning they most likely don’t have enough cash on hand to pay out the full sum (or if they do, it would hurt their ability to pay their other liabilities, creating the equivalent of a “bank run” risk)
It’s not the only factor. They’re also additionally known to “overinsure” collateral, meaning they most likely don’t have enough cash on hand to pay out the full sum (or if they do, it would hurt their ability to pay their other liabilities, creating the equivalent of a “bank run” risk)