recycling of deposits

'recycling of deposits' can also refer to...


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A situation that can occur when there is a run on a bank, i.e. when depositors clamour to withdraw their deposits from a bank thought to be in trouble. In these circumstances other banks and financial institutions may be persuaded to come to the aid of the ailing bank by lending it their own surplus deposits to prevent the collapse of the troubled bank.

Subjects: Financial Institutions and Services.

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