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I mean "unprofitable" because they can't make money on $90,000? It's not unprofitable, instead, the bank is inefficient.
by mrj 15y ago
I mean "unprofitable" because they can't make money on $90,000? It's not unprofitable, instead, the bank is inefficient.
- tsotha 15y agoBanks make money by lending. In the current environment they have more reserves than they need to cover the loans they're writing, so the extra goes to the central bank (at least in the US) and makes almost no interest. Of course when the economy picks up the picture changes, but right now they really don't have much to do with the money. It's not that the bank is inefficient, it's that there aren't enough worthy (in the green eye shades sense) borrowers out there. Edit: Yes, I know they make money off of fees, too, but I doubt they collect many fees on accounts with more than about $1k.