I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand.

It's time for some money we have.

Last week we all became banking experts, right?

Even if you hadn't heard of SVB before Monday, by the end of the week, you probably had a

solid opinion about what had gone wrong with their balance sheets.

Which is good, banking can seem super complicated, and it is.

But it is also one of the fundamental systems we all rely on.

We trust that when we tap our debit card, our phone, or our watch on the payment portal

at the store, our money is going to be there.

But we aren't just manifesting that money with each tap, there is a structure in place

that gets our money where we need it.

Understanding that system is important.

There are a lot of questions about how much we can trust those systems and we've watched

banks around the world struggle.

So before we get into those struggles, let's talk about how the system works.

Banks take in deposits and then they loan out the money and invest it.

But legally, they are required to have a reasonable amount of cash on hand at all times to meet

the needs of depositors.

Our current economic situation is very different than it was even a year ago.

As a result of inflation, depositors are spending more on basic purchases and generally

doing different things with their money.

Meaning banks need to keep more cash on hand.

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