Skip to comments.US banks warn Fed interest cut could force them to charge depositors
Posted on 11/25/2013 3:35:11 AM PST by markomalley
Leading US banks have warned that they could start charging companies and consumers for deposits if the US Federal Reserve cuts the interest it pays on bank reserves.
Depositors already have to cope with near-zero interest rates, but paying just to leave money in the bank would be highly unusual and unwelcome for companies and households.
The warning by bank executives highlights the dangers of one strategy the Fed could use to offset an eventual tapering of the $85bn a month in asset purchases that have fuelled global financial markets for the last year.
(Excerpt) Read more at ft.com ...
What about credit unions?
Don't you mean, "we are for profit companies and we wont just sit here and make nothing no matter how badly we screw up, because we're too big to fail"
The banks are only surviving because of the ‘free money’ that the Fed keeps sliding over to them. Every American....from a retirement prospective...is suffering because of bad CD rates and easy cash for the banks. The difference between now and 1929....we’ve kept the banks functional with the Fed money and the rate. We would have done quiet well in 1929, if we’d attempted this same gimmick....at least for a couple of years until reality sunk in.
The elevator charges me money to store my grain that really isn’t there. Why shouldn’t the bank not be able to charge me to store my money that really isn’t there?
Galactic historians will reflect on this era as the last besdt chance at turning around this solar system,, but with a dying sun (albeit slowly) and an acidifying ocean of water and a sea of vapious beliefs. But, sometimes even the gods know when they are licked and its time to move on.
We could have been contenders, instead, we will likely never even make it out of the celestial race gate formative years.
Do that and I will stop depositing. Of course that means the police will take my cash and accuse me of dealing drugs, but at least that it open corruption.
Free money? How do you figure that?
So were low interest rates in 2002-2003 also the result of saving the banks from failing?
How does low interest rates save the banks? A key indicator of how well banks are making money with our money is something called net interest margin. It’s been falling for years. For all the “free money” they have they are also loaning that money out at really low interest rates. The banks are making less money now in this free money environment then they were making in 2007.
Your theory doesn’t hold water.
Every bank that was going to fail was bought out by another bank that wasn’t going to fail. Citigroup might be the only exception. Bank of America was asked to buy assets to prevent them from failing. JP Morgan and Wells Fargo scooped up assets on the cheap because they were failing.
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