Well think about the supply side - they would rather take 1.5% return(IOER) than loan out at 1.6-8.0% to their peers. If it was low risk why do it? Paying taxes

Well think about the supply side - they would rather take 1.5% return(IOER) than loan out at 1.6-8.0% to their peers. If it was low risk why do it? Paying taxes is not considered low risk, you don't really get any return on taxes as a bank. I follow this topic on real vision with info from some insiders and big name finance people. The whole thing is a mess. Like spaghetti code with thousands of if statements and no comments, and none of the "developers" (in the Fed or in the trading desks) is answering any questions. The big take from all this is that the most profitable way forward for the banks now is to creatively mess up as much as they can and declare "out of my control" reserve emergency. What finance people find fascinating is there are no leaks to the public. No whistleblowers and no regulator questioning it in general. The official explanation doesn't make much sense. Both the taxes and the basel 3 provisions were known well in advance and the projections of the profits are within normal ranges. It doesn't make sense that they were caught by surprise.