"Unspendable Wealth" (Molly Jong-Fast)

[dickthegrouch]

3. Think about all those Swiss accounts belonging to long-dead people

I would hope they all had succession plans, but the reality is probably that many didn't.

I suspect the bank is using that money to prop up its loan portfolios. Declaring the money to be the bank's assets rather than those of the actual, or putative, owners.

In theory that's they way new loans are made anyways. Assets the bank has on deposit are used as collateral for loans. I also assume the bank's expectation of having to give it back is significantly less for an account that's been dormant for 50+ years.

Of course, these days, much of it is so highly leveraged that the whole house of cards can come crashing down with the slightest unexpected provocation.

Risk management, just like many other sciences in the US, is becoming a dying art. (irony intended).