Provident Remark SVB

Unlike 2008, Credit Suisse and SBV haven’t been saved by governments. But let’s not make ‘bailout’ a dirty word

Reading now: 258
theguardian.com

B anks are a special type of organisation. They take deposits and lend these funds to borrowers over long periods. It is pretty remarkable when you think about it.

Banks make loans over many years, but you and I can withdraw the savings that banks use to fund the loans instantly.For banks to operate this franchise model profitably, they essentially rely on two ingredients.

First, they need to earn a profit by charging higher interest on long-term loans than they pay on short-term deposits. This model has come under severe strain in recent years.

Owing to high inflation now and lower expected inflation in the next few years, many banks currently pay more for deposits and other funds than they earn on long-term loans and other assets.

Read more on theguardian.com
The website fvbb.com is an aggregator of news from open sources. The source is indicated at the beginning and at the end of the announcement. You can send a complaint on the news if you find it unreliable.

Related News

DMCA