Can credit union and coop banks replace traditional banks completely?
Edit (adding additional question): Has there been an attempt to do this on a national or societal level?
Can credit union and coop banks replace traditional banks completely?
Edit (adding additional question): Has there been an attempt to do this on a national or societal level?
It’s the idea that bank A wrote a loan and is required by the government to maintain a small amount of cash to back that loan. So if all the money goes to Credit Union B, Bank A would be declared insolvent.
However that wouldn’t cause any economic collapse. Banks bundle and sell off their loans all the time. If Bank A no longer had deposits to cover a loan, they’d sell the loan to Bank B who did.