tag:blogger.com,1999:blog-20142791.post4096428639526066166..comments2024-03-11T07:41:19.149-04:00Comments on The Perfect Substitute: Bank Runs and Deposit InsuranceUnknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-20142791.post-28084936740556151522010-06-20T15:05:12.246-04:002010-06-20T15:05:12.246-04:00Check your premise. It's true there's no ...Check your premise. It's true there's no "back of the line" problem with MMMFs, but they can be "run" in the sense of being drained out. If folks didn't want to see the value of their hunk dip below "the buck," they might well have withdrawn funds from those accounts en masse. The fund can still pay (though at perhaps less than 1:1), but the damage that would have done to markets would have been potentially large.<br /><br />The point is not to justify the insurance but to suggest that maybe this was not about protecting depositors as much as it was about protecting the funds and the folks who sold them the assets they invest in.Steven Horwitzhttps://www.blogger.com/profile/17656905035111045549noreply@blogger.com