Game crashes and console or emu explodes IN YOUR FACE!
Seriously though, it's intentional, but eh why not find out for yourself? Remember that you are not able to buy anything until the next town... Frigidia or whatever it was called.
My best guess though it would be like the BOF2 event (I think) where you put all the money in the bank in order to avoid losing $$$. In this case, you would lose whatever you have.... but it's unclear what the result would be.
The worst case is that the script keeps looping indefinately because you are unable to give him enough $$$.
