banks need shoring opportunity #75
Winnie
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banks are going insolvent without any debt(just deposit liability) while loans are available on the bond market, I thought we made it so that bonds had to be taken to shore up a negative deposit situation, can you explain that mechanism, and if that mechanism is fundamentally a 0% reserve requirement, and can we impose a reserve requirement in the config? i.e. 10% of deposits must be in cast BEFORE PnL & Insolvency resolve? fundementally all fo what I am talking about should be merged into the take bonds phase as a minimum take to make a position viable, and only go insolvent if the position cannot be shored by the bond market.
Assigned and done: PR #76. Short version: yes, the old rule was effectively 0% reserve — it only forced borrowing to cover interest+op shortfalls, never the deposit principal. New
reserve_ratioconfig (default 10%) is enforced BEFORE PnL/insolvency: a short bank force-borrows the minimum take from the bond market; only if the market cannot shore the position does it go insolvent.reserve_ratio: 0= old behavior. Tests + smoke + direction bench all green.Shipped via PR #76: configurable reserve_ratio (default 10%, 0 = off), enforced BEFORE PnL and insolvency — a short bank is force-borrowed up to the reserve from the bond market, and only a position the market cannot shore up goes insolvent. The take-bonds screen has a direct SHORE UP menu item (minimum take to stay in, with an s quick-take), and brains can read (config 'reserve-ratio'). Closing.