What happens when a bank like chase "writes off" debt. does it directly effect the currency?

Question

What happens when a bank like chase "writes off" debt. does it directly effect the currency?

Answer 1

Banks are more likely to write off bad debt because of currency effects, after the fact.  

Banks and most all companies have a certain amount in accounts set aside for bad debt expense.  So, pretty much unless its a much larger amount than what is in the bad debt expense account not much happens.

Answer 2

When a bank has to write off debt, it is basically saying that they are not going to collect it.  This is an expense of the bank that is passed on to each of the other depositors in that bank.  It can result in lower interest rates being paid to the bank's customers, and higher interest rates being charged to borrowers.  These fluctuations in interest rates have an effect on inflation and on the valuation of the currency - if it is wide spread enough.

Answer 3

Banks are writing off debt almost on a daily basis, just as most other companies. The size of the write-off is what makes the difference. It is doubtful that one bank write-off could affect currency although not impossible.