A fractional bank is one that doesn't have liquidity to cover all obligations, but has enough non-liquid assets to cover all obligations. They can get the money if all customers withdraw, it just might take them a few days.
A fraudulent bank is one that doesn't have enough liquidity or assets to cover all their obligations. Mt Gox and FTX were perfect examples of this.
The fact that some of their assets went up in the years or decades since is irrelevant. Madoff would probably be in the green now, too, simply thanks to asset inflation.
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A fractional bank is one that doesn't have liquidity to cover all obligations, but has enough non-liquid assets to cover all obligations. They can get the money if all customers withdraw, it just might take them a few days.
A fraudulent bank is one that doesn't have enough liquidity or assets to cover all their obligations. Mt Gox and FTX were perfect examples of this.
The fact that some of their assets went up in the years or decades since is irrelevant. Madoff would probably be in the green now, too, simply thanks to asset inflation.