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1:1 banking essentially guarantees long-term loss of principal for depositors, albeit slowly. The main "service" a bank would provide in that scenario is holdin
by suresk 4y ago
1:1 banking essentially guarantees long-term loss of principal for depositors, albeit slowly. The main "service" a bank would provide in that scenario is holding onto your money for you and instead of paying interest on it, charging you a few percent per year to hold onto it for you.
Also, in your model, where does money for loans come from? How are borrowing costs impacted by a major source of funds for loans going away?
- zerbinxx 4y agoIronically, returns on bank savings accounts have been so low for so long that my present APR of like 1% is functionally the same as if they just held onto the money for me. That would probably do a great deal to explain why no one uses savings accounts anymore