Our liabilities are still in excess of our assets, so now the bondholders enter the picture.

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In its bankruptcy Chrysler was shorn of much of its excess capacity in North America and various other liabilities.

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Instead, banks have accumulated reserves far in excess of the amount required to back their deposit liabilities.

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The fact is even in the depths of a recession a banking system flush with excess reserves is always in a position to pyramid up its deposit liabilities, to create Uncovered Money Substitutes, regardless of the demand for loans.

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Net cash is a traditional measure of excess cash and is calculated by totaling cash, marketable securities and short-term investments, and subtracting current liabilities.

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One option is to use excess assets to increase liquidity, by internally securitising loans made in one country and moving them to another to back liabilities there.

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