On: Layoffs hit Quora

[arkadiyt]

> no one seems to know why there’s less liquidity there

It's because JPMorgan Chase and friends think there is too much risk of intraday bankruptcy right now and no one wants to be left hanging on their loan.

[o-__-o → arkadiyt]

here's an interesting thought experiment.. what happens to your loan when your bank goes bankrupt ?

[rswail → o-__-o]

Your loan is an asset of the bank. The administrators or liquidators of the bank can sell that asset to someone else.

Or the entire bank can be purchased/merged in which case your loan becomes an asset on the purchaser's balance sheet.

Bankruptcy doesn't mean "all bets are off".