Banks make money by lending out the money they have to make more money. They can also borrow from other banks to satisfy the Fed's reserve requirements, known as the federal funds rate.
The lack of oversight in banking can lead to moral hazard for CEOs and boards, as well as risks for the individual bank, which should be monitored by regulators for systemic risk.
Small and mid-sized banks are going through a tough time, and a slowing economy with high interest rates isn't helping. This could lead to less expansion and hiring for main street businesses, which would be bad for bank profitability.
The effectiveness of stress test methodologies in ensuring adequate capital reserves, while creating low cost capital and maintaining liquidity in the markets, is a topic of ongoing debate. If stress tests are too limiting, the cost of capital goes up and it becomes difficult to trade, resulting in lower market liquidity.
Russell borrowed a significant amount of money from a minor child's account, which he never paid back with his salary or dividends. It's unclear why he didn't use loans from his own bank instead.
A man discovers a high-denomination bead in his account, which he didn't expect to have.
The banking system in Shandong has been in operation for centuries and is led by a man with a lot of power. The author draws attention to the authoritarian nature of the system and the influence of state violence in upholding it.
The speaker talks about how banks can loan out money that is deposited in their accounts nine times over because of fractional reserve banking. They also mention the fear associated with losing time to earn money.
The issue of providing banking services to all people boils down to accessibility and local regulations; it may be necessary to promote the creation of local applications.
Banks often view depositors as a cost center as they have to spend money on acquiring them, causing challenger banks to become a potential threat for traditional banks. This differs from loan providers who can build long-term relationships with customers, as loans are considered a commodity.
