Reference no: EM133492280

Question

California structured its IOUs as a "registered warrant" as opposed to a regular warrant, which is how the state's bills are usually paid. California has used IOUs twice since the Great Depression--in 1992 and 2009. When the state issued $ 2.6 billion worth of IOUs in 2009, the California comptroller called them a "promise to pay," and in fact the IOUs were redeemed in relatively short order. Prior to redemption, some--but not all--banks were willing to accept the IOUs as deposits. Otherwise, the state paid holders at maturity. So you expect banks in Texas to pay Bob?