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Anyone can make loans. However, banks borrow newly created money from the ECB or FED at an extremely low rate. If you borrow money at 2% from a bank then they a

Anyone can make loans. However, banks borrow newly created money from the ECB or FED at an extremely low rate. If you borrow money at 2% from a bank then they are getting it at 0.1%. The spread - that 1.9% - is their profit.

tome 11y ago
> The spread - that 1.9% - is their profit. No it's not. There are plenty of costs involved in issuing loans that will eat into that 1.9%.
- charlesdm 11y ago
  Well, obviously there are running costs / default risks / etc. I was just pointing out how a small bank works in its simplest form.