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so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving

so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?

MrYellowP 3y ago
It also implies a booming, healthy economy where more people want money to start businesses. Also, you can choose your tyrant. If the bank you're at offers you shitty deals, switch the bank. Nobody forces you to accept bad deals. By the way, do you have time to talk about this amazing money-doubling service I've created?
- 2Gkashmiri 3y ago
  yes. i am indeed free to discuss the same with the current nigerian prince. (/s obviously)
- toyg 3y ago
  > It also implies a booming, healthy economy where more people want.money to start businesses Lol, have you ever been to Italy...? Banks will not lend to you unless you're quite rich already. Catholicism says debit bad, and the country is pretty conservative as a whole. Italian banks making money implies two things: them screwing consumers (famously called literally "available cattle", il parco buoi, in local finance circles) and rich people getting richer.
  - ffhhttt 3y ago
    What does that have do with Religion? Most banks everywhere behave the same way..
    - bryanrasmussen 3y ago
      highly religious countries trend more conservative. Italy is a highly conservative country. Not sure if that explains their financial problems, probably not. on edit: An Italian coworker just pointed out he wouldn't say Italy was very conservative, which I guess in a lot of ways is true - especially when compared to U.S and some other countries. Maybe actually the 'Conservative' - 'Liberal' labeling doesn't work well in this case, for example Italians believe in free health care and in my experience do a better job at it than Denmark. In the U.S free health care is "anti-conservative"
      - ffhhttt 3y ago
        I wouldn’t define Italy as highly conservative especially the north where most of economic activity is concentrated. If we did that we’d have to say that some Eastern European countries are “ultra” conservative. > Not sure if that explains their financial problems, probably not. I would say Switzerland is pretty conservative as well (if not more in some aspects but less in others)
        bryanrasmussen 3y ago
        yeah also there is a strong divide on this kind of thing between North and South, my experience is mainly Naples on down.
      - toyg 3y ago
        To expand a bit: Italy is economically conservative. People don't like to invest, banks don't like to lend to businesses, and when businesses fail (which is just part of the capitalism game) everyone cries for the State to make them whole. Most people favour long-term assets like real estate, and as soon as any profit is generated it is typically "privatized" rather than reinvested. Obviously I'm painting with a very broad brush. There are virtuous businesses, like anywhere; and it's still a G8 country with a massive economy. But it's not a country that, as a whole, values economic risk-taking. Somewhat ironically, I think we were more daring when the overall system was less free-market-oriented (the Italian State used to own a lot of large "strategic" businesses directly, up until the '90s), maybe because rich folks had to show they were better than the State at running things. On social issues, it's a different (and very complex) story.
        ffhhttt 3y ago
        > To expand a bit: Italy is economically conservative. People don't like to invest, banks don't like to lend to businesses, and when businesses fail That’s true. A lot (most?) of Europe seems to be like that, though
    - ir123 3y ago
      Islam forbids interest, so religion kinda has something to do with banks. But capitalism uh.. finds a way
      - ffhhttt 3y ago
        Yeah, I’m talking about Italy specifically here. You know.. the birthplace of modern banking.
      - 2Gkashmiri 3y ago
        it does not. there is absolutely no basis for "islam forbits interest". the way "islamic banking" was envisioned, they created a problem then suggested an alternative which is the same thing, just with arabic names. there is something called "shariah compliant banking" but "islamic banking" on its own is a misnomer and doesn't exist. don't believe me, here is a video of Dr. Mohammad Shahrour on the subject. https://www.youtube.com/watch?v=dEk_8-jaSUs https://www.youtube.com/watch?v=dEk_8-jaSUs its really short but brings home the idea. your next question might be "so...whats islamic banking then". the answer is simple. when you can't fight in a free market so what you do is change the market so that customers automatically opt for your "superior" product as opposed to the competition. You can read up on this by finding "why need for islamic banking" arose. the problem didn't exist till then so someone just literally invented it and then sold a solution
        ir123 3y ago
        your answer really doesn't make sense to me, can you explain it a bit more? https://en.wikipedia.org/wiki/Riba https://en.wikipedia.org/wiki/Riba > While Muslims agree that riba is prohibited, not all agree on what precisely it is.[2][3] It is often used as an Islamic term for interest charged on loans,[Note 1] and the belief this is based on — that there is a consensus among Muslims that all loan/bank interest is riba — forms the basis of a $2 trillion Islamic banking industry This is enough to negate what you said here: >it does not. there is absolutely no basis for "islam forbits interest". Could you explain what you mean here? >the problem didn't exist till then so someone just literally invented it and then sold a solution What problem didn't exist and what was invented and what was the solution?
  - emanuele232 3y ago
    ??? have YOU ever been to italy? from my experience banks are totally going to lend you money for you mortgage if you have a non-temporary contract that covers 80% of your house cost. you just need to have roughly 30% of the house cost cash and a stable job that pays enough, but with a 1.3k net salary (median income) and 30k you can totally buy a 110k home talking about the north, if you live in the south just move already xd
    - toyg 3y ago
      Mortgages are not business banking. Mortgages are fine, because if you don't pay the bank takes your house - possibly the most valuable asset category in the country.
  - wolfhumble 3y ago
    > Catholicism says debit bad, and the country is pretty conservative as a whole. From Wikipedia: "The present era of banking can be traced to medieval and early Renaissance Italy, to the rich cities in the centre and north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th-century Florence, establishing branches in many other parts of Europe." . . . "The word bank was taken into Middle English from Middle French banque, from Old Italian banco, meaning "table", from Old High German banc, bank "bench, counter". Benches were used as makeshift desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths."
  - nunobrito 3y ago
    Kind of surprised to read someone talking wrongly with that much certainty. Catholicism isn't about "debit bad", it is about "interest bad" and this only applies to catholics owning banks. Historically this has left jews in Italy running banks and abusing its citizens (that cattle, or more accurately "goy" in native language of those bank owners) just fine since centuries. Please remember that the Vatican created its own bank (financial group) to escape the jewish monopoly on banks. Within the catholic circles you'd hear them now promoting Santander as catholic-friendly option in Europe for normal citizens to escape that monopoly. Money lending isn't an issue within European catholic groups as long as it avoids going overboard with interests.
  - thefz 3y ago
    Hey, as an Italian, this is a superficial, cliché-ridden opinion from someone who does not know the country much.
    - toyg 3y ago
      Sorry - I was just born there, spent a few decades, and still go back once or twice a year. Obviously mine was a bit of a throwaway comment, but you can't deny that the banking sector in Italy is vergognoso, and one of the reasons the country continues to stutter economically since the '90s. To be fair, they are not the only one - the Italian elite is, as a whole, pretty bad.
- ffhhttt 3y ago
  What if the banking system is dominated by an oligopoly (the situation throughout most of Europe) and they are all offering the same deal? > money to start businesses What proportion of bank lending is that? Close to insignificant.. Pretty much all small businesses/low collateral loans are backed by governments which are already pure profit for the banks
tomatocracy 3y ago
What has happened across the banking sector is that net interest margins have improved because rates charged on loans have moved up more quickly than rates paid on deposits. That might yet be offset by higher credit losses but it's too early to know. In any case, it's expected that deposit rates will catch up (in fact they already are starting to) and net interest margins will continue to shrink a bit from where we are now. However, there is also an argument that across the system, bank net interest margins were actually abnormally low for much of the period of zero/sub-zero interest rate policy. Essentially there are two reasons for this: - There was a pretty effective zero (or close to zero) bound on the interest rates they could pay on deposits. Even before rates were negative this would have compressed net interest margins as banks typically paid below the policy rate on much of their deposit base historically. - Large amounts of central bank liquidity added to the system (through all the various programmes - LTROs etc) allowed weaker banks to fund themselves more cheaply, leading in turn to lower interest rates charged on lending than a market without this additional liquidity would have led to In a way, you can see this in the fact that the stock market consistently priced banks at a meaningful discount to book value for a long period of time. The effects of this net interest margin compression were also not spread evenly across the sector. Weaker banks arguably suffered from these effects much less than stronger banks and perhaps even saw a net benefit.
- Eddy_Viscosity2 3y ago
  Banks (and bankers) were still making ALOT of money even during this period with 'abnormally low margins'. Banks are government supported essential services and giant profits from this sector are parasitic on society and the rest of the economy. People hate taxes sure, but being charged an overdraft fee because a bank algorithm withdrew funds for your bills before depositing funds from your paycheque is something people also hate.
ricardobayes 3y ago
In Europe banks give 2-2.5% on deposits these days while real inflation is in double digits, at least. When US banks give double the yield on deposits you know something's off.
- TheFattestNinja 3y ago
  That's not true. You can easily get, in Italy, over 4% on 12mo-locked saving accounts (random comparison website : https://www.confrontaconti.it/conto-migliore/miglior-conto-deposito.aspx https://www.confrontaconti.it/conto-migliore/miglior-conto-d... ), and Italy inflation right now is around 6%.
  - olivierlacan 3y ago
    That's not comparable at all to 4.80% APY savings and checking accounts in the U.S. right now with far more flexible rules. This kind of return on ultra flexible accounts is basically unheard of in most of Europe in recent memory as far as I know (born & lived in Europe as recently as 2019). What you describe are called Certificate of Deposit (CDs) in the U.S. and you can get 5.50% for those in August 2023 [1]. [1]: https://www.nerdwallet.com/best/banking/cd-rates https://www.nerdwallet.com/best/banking/cd-rates
    - gambiting 3y ago
      If you define UK as Europe still, then yes, you can get an easy access(withdraw whenever you want) saving account with 5% interest without any issue. Or 6%+ if you're willing to lock the money for some time: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ https://www.moneysavingexpert.com/savings/savings-accounts-b...
  - ricardobayes 3y ago
    Maybe in Italy it's better, definitely not as rosy a picture in Spain https://thebanks.eu/compare-banking-products/savings-accounts/Spain https://thebanks.eu/compare-banking-products/savings-account...
  - 3y ago
swarnie 3y ago
My grasp of capitalist theory is somewhat lacking but is this the point where the invisible hand would conjure up a competitor whith lower rates and higher pay outs, taking business from the gouging banks?
- chmod775 3y ago
  Those gouging banks could immediately use their scale to undercut that competitor, killing it, then return to whatever they were doing. Considering how much of an upfront investment (not just in pure cash, but also in agreements, infrastructure and operations) becoming anything more than a basic savings bank is, the risk is very great. Likely existing players can go pretty far before before the risk/reward of creating a new bank checks out. The real question is why those existing banks aren't trying to undercut each other. Maybe there's some pressure and risks that make them behave this way in the current economy, or maybe it's good old price fixing.
  - memefrog 3y ago
    They do undercut each other. Interest rates respond directly to interest rate changes from central banks and commercial savings banks operate on thin margins. It is not price fixing for people to make large profits.
- pravus 3y ago
  No, you can't use "invisible hand" theories in the current economy because the hand is very visibly the government when it comes to bank monetary policy. Any claim that world economies are anything like the markets Adam Smith envisioned would be completely thrown out the window after 2008. They were already on very tenuous grounds. Or maybe another way to look at it this: the invisible hand of force is yet another invisible hand operating in the markets.
- memefrog 3y ago
  Competition relies on the ability for new players to enter the market. That's very difficult in highly regulated industries like banking. Some of those regulations exist for good reasons. Many of them are not. For example, there is no evidence that the US-pushed anti-money-laundering rules that every country has been essentially forced to adopt have resulted in any reduction of criminal activity, anywhere, ever. I'm not exaggerating when I say that. Nobody has ever demonstrated their effectiveness in stopping crime, which was what we were told they would do. And they're a huge compliance cost for banks, worldwide. It's not really fair for the state to impose huge regulatory hurdles that make competition impossible and then for leftists to go 'hurr but what about the invisible hand meme now???', when that obviously relies on FREE MARKETS, which we increasingly do not have.
LatteLazy 3y ago
That depends what you mean by customers and "gouged". The vast majority of deposits come from companies and ultra wealthy individuals. Your average human customer is a borrower. You also have to remember the regime we were and are in: 2 years ago, banks borrowed or paid depositors .5% and charged borrowers 1%. A shitty .5% gross margin. Now, if they borrow at 4% and charge 6% that's 4x the return (2% Vs .5%). But it's also (a) move average historically and (b) smaller as a spread.

so.... if banks make "super profit", doesnt that imply they managed to gouge customers by charging them excess % on their loans and fucked depositors by giving them less % on their deposits?

MrYellowP 3y ago

It also implies a booming, healthy economy where more people want money to start businesses. Also, you can choose your tyrant. If the bank you're at offers you shitty deals, switch the bank. Nobody forces you to accept bad deals. By the way, do you have time to talk about this amazing money-doubling service I've created?

2Gkashmiri 3y ago
yes. i am indeed free to discuss the same with the current nigerian prince. (/s obviously)
toyg 3y ago
> It also implies a booming, healthy economy where more people want.money to start businesses Lol, have you ever been to Italy...? Banks will not lend to you unless you're quite rich already. Catholicism says debit bad, and the country is pretty conservative as a whole. Italian banks making money implies two things: them screwing consumers (famously called literally "available cattle", il parco buoi, in local finance circles) and rich people getting richer.
- ffhhttt 3y ago
  What does that have do with Religion? Most banks everywhere behave the same way..
  - bryanrasmussen 3y ago
    highly religious countries trend more conservative. Italy is a highly conservative country. Not sure if that explains their financial problems, probably not. on edit: An Italian coworker just pointed out he wouldn't say Italy was very conservative, which I guess in a lot of ways is true - especially when compared to U.S and some other countries. Maybe actually the 'Conservative' - 'Liberal' labeling doesn't work well in this case, for example Italians believe in free health care and in my experience do a better job at it than Denmark. In the U.S free health care is "anti-conservative"
    - ffhhttt 3y ago
      I wouldn’t define Italy as highly conservative especially the north where most of economic activity is concentrated. If we did that we’d have to say that some Eastern European countries are “ultra” conservative. > Not sure if that explains their financial problems, probably not. I would say Switzerland is pretty conservative as well (if not more in some aspects but less in others)
      - bryanrasmussen 3y ago
        yeah also there is a strong divide on this kind of thing between North and South, my experience is mainly Naples on down.
    - toyg 3y ago
      To expand a bit: Italy is economically conservative. People don't like to invest, banks don't like to lend to businesses, and when businesses fail (which is just part of the capitalism game) everyone cries for the State to make them whole. Most people favour long-term assets like real estate, and as soon as any profit is generated it is typically "privatized" rather than reinvested. Obviously I'm painting with a very broad brush. There are virtuous businesses, like anywhere; and it's still a G8 country with a massive economy. But it's not a country that, as a whole, values economic risk-taking. Somewhat ironically, I think we were more daring when the overall system was less free-market-oriented (the Italian State used to own a lot of large "strategic" businesses directly, up until the '90s), maybe because rich folks had to show they were better than the State at running things. On social issues, it's a different (and very complex) story.
      - ffhhttt 3y ago
        > To expand a bit: Italy is economically conservative. People don't like to invest, banks don't like to lend to businesses, and when businesses fail That’s true. A lot (most?) of Europe seems to be like that, though
  - ir123 3y ago
    Islam forbids interest, so religion kinda has something to do with banks. But capitalism uh.. finds a way
    - ffhhttt 3y ago
      Yeah, I’m talking about Italy specifically here. You know.. the birthplace of modern banking.
    - 2Gkashmiri 3y ago
      it does not. there is absolutely no basis for "islam forbits interest". the way "islamic banking" was envisioned, they created a problem then suggested an alternative which is the same thing, just with arabic names. there is something called "shariah compliant banking" but "islamic banking" on its own is a misnomer and doesn't exist. don't believe me, here is a video of Dr. Mohammad Shahrour on the subject. https://www.youtube.com/watch?v=dEk_8-jaSUs https://www.youtube.com/watch?v=dEk_8-jaSUs its really short but brings home the idea. your next question might be "so...whats islamic banking then". the answer is simple. when you can't fight in a free market so what you do is change the market so that customers automatically opt for your "superior" product as opposed to the competition. You can read up on this by finding "why need for islamic banking" arose. the problem didn't exist till then so someone just literally invented it and then sold a solution
      - ir123 3y ago
        your answer really doesn't make sense to me, can you explain it a bit more? https://en.wikipedia.org/wiki/Riba https://en.wikipedia.org/wiki/Riba > While Muslims agree that riba is prohibited, not all agree on what precisely it is.[2][3] It is often used as an Islamic term for interest charged on loans,[Note 1] and the belief this is based on — that there is a consensus among Muslims that all loan/bank interest is riba — forms the basis of a $2 trillion Islamic banking industry This is enough to negate what you said here: >it does not. there is absolutely no basis for "islam forbits interest". Could you explain what you mean here? >the problem didn't exist till then so someone just literally invented it and then sold a solution What problem didn't exist and what was invented and what was the solution?
- emanuele232 3y ago
  ??? have YOU ever been to italy? from my experience banks are totally going to lend you money for you mortgage if you have a non-temporary contract that covers 80% of your house cost. you just need to have roughly 30% of the house cost cash and a stable job that pays enough, but with a 1.3k net salary (median income) and 30k you can totally buy a 110k home talking about the north, if you live in the south just move already xd
  - toyg 3y ago
    Mortgages are not business banking. Mortgages are fine, because if you don't pay the bank takes your house - possibly the most valuable asset category in the country.
- wolfhumble 3y ago
  > Catholicism says debit bad, and the country is pretty conservative as a whole. From Wikipedia: "The present era of banking can be traced to medieval and early Renaissance Italy, to the rich cities in the centre and north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th-century Florence, establishing branches in many other parts of Europe." . . . "The word bank was taken into Middle English from Middle French banque, from Old Italian banco, meaning "table", from Old High German banc, bank "bench, counter". Benches were used as makeshift desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths."
- nunobrito 3y ago
  Kind of surprised to read someone talking wrongly with that much certainty. Catholicism isn't about "debit bad", it is about "interest bad" and this only applies to catholics owning banks. Historically this has left jews in Italy running banks and abusing its citizens (that cattle, or more accurately "goy" in native language of those bank owners) just fine since centuries. Please remember that the Vatican created its own bank (financial group) to escape the jewish monopoly on banks. Within the catholic circles you'd hear them now promoting Santander as catholic-friendly option in Europe for normal citizens to escape that monopoly. Money lending isn't an issue within European catholic groups as long as it avoids going overboard with interests.
- thefz 3y ago
  Hey, as an Italian, this is a superficial, cliché-ridden opinion from someone who does not know the country much.
  - toyg 3y ago
    Sorry - I was just born there, spent a few decades, and still go back once or twice a year. Obviously mine was a bit of a throwaway comment, but you can't deny that the banking sector in Italy is vergognoso, and one of the reasons the country continues to stutter economically since the '90s. To be fair, they are not the only one - the Italian elite is, as a whole, pretty bad.
ffhhttt 3y ago
What if the banking system is dominated by an oligopoly (the situation throughout most of Europe) and they are all offering the same deal? > money to start businesses What proportion of bank lending is that? Close to insignificant.. Pretty much all small businesses/low collateral loans are backed by governments which are already pure profit for the banks

tomatocracy 3y ago

What has happened across the banking sector is that net interest margins have improved because rates charged on loans have moved up more quickly than rates paid on deposits. That might yet be offset by higher credit losses but it's too early to know. In any case, it's expected that deposit rates will catch up (in fact they already are starting to) and net interest margins will continue to shrink a bit from where we are now. However, there is also an argument that across the system, bank net interest margins were actually abnormally low for much of the period of zero/sub-zero interest rate policy. Essentially there are two reasons for this: - There was a pretty effective zero (or close to zero) bound on the interest rates they could pay on deposits. Even before rates were negative this would have compressed net interest margins as banks typically paid below the policy rate on much of their deposit base historically. - Large amounts of central bank liquidity added to the system (through all the various programmes - LTROs etc) allowed weaker banks to fund themselves more cheaply, leading in turn to lower interest rates charged on lending than a market without this additional liquidity would have led to In a way, you can see this in the fact that the stock market consistently priced banks at a meaningful discount to book value for a long period of time. The effects of this net interest margin compression were also not spread evenly across the sector. Weaker banks arguably suffered from these effects much less than stronger banks and perhaps even saw a net benefit.

Eddy_Viscosity2 3y ago
Banks (and bankers) were still making ALOT of money even during this period with 'abnormally low margins'. Banks are government supported essential services and giant profits from this sector are parasitic on society and the rest of the economy. People hate taxes sure, but being charged an overdraft fee because a bank algorithm withdrew funds for your bills before depositing funds from your paycheque is something people also hate.

ricardobayes 3y ago

In Europe banks give 2-2.5% on deposits these days while real inflation is in double digits, at least. When US banks give double the yield on deposits you know something's off.

TheFattestNinja 3y ago
That's not true. You can easily get, in Italy, over 4% on 12mo-locked saving accounts (random comparison website : https://www.confrontaconti.it/conto-migliore/miglior-conto-deposito.aspx https://www.confrontaconti.it/conto-migliore/miglior-conto-d... ), and Italy inflation right now is around 6%.
- olivierlacan 3y ago
  That's not comparable at all to 4.80% APY savings and checking accounts in the U.S. right now with far more flexible rules. This kind of return on ultra flexible accounts is basically unheard of in most of Europe in recent memory as far as I know (born & lived in Europe as recently as 2019). What you describe are called Certificate of Deposit (CDs) in the U.S. and you can get 5.50% for those in August 2023 [1]. [1]: https://www.nerdwallet.com/best/banking/cd-rates https://www.nerdwallet.com/best/banking/cd-rates
  - gambiting 3y ago
    If you define UK as Europe still, then yes, you can get an easy access(withdraw whenever you want) saving account with 5% interest without any issue. Or 6%+ if you're willing to lock the money for some time: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ https://www.moneysavingexpert.com/savings/savings-accounts-b...
- ricardobayes 3y ago
  Maybe in Italy it's better, definitely not as rosy a picture in Spain https://thebanks.eu/compare-banking-products/savings-accounts/Spain https://thebanks.eu/compare-banking-products/savings-account...
- 3y ago

swarnie 3y ago

My grasp of capitalist theory is somewhat lacking but is this the point where the invisible hand would conjure up a competitor whith lower rates and higher pay outs, taking business from the gouging banks?

chmod775 3y ago
Those gouging banks could immediately use their scale to undercut that competitor, killing it, then return to whatever they were doing. Considering how much of an upfront investment (not just in pure cash, but also in agreements, infrastructure and operations) becoming anything more than a basic savings bank is, the risk is very great. Likely existing players can go pretty far before before the risk/reward of creating a new bank checks out. The real question is why those existing banks aren't trying to undercut each other. Maybe there's some pressure and risks that make them behave this way in the current economy, or maybe it's good old price fixing.
- memefrog 3y ago
  They do undercut each other. Interest rates respond directly to interest rate changes from central banks and commercial savings banks operate on thin margins. It is not price fixing for people to make large profits.
pravus 3y ago
No, you can't use "invisible hand" theories in the current economy because the hand is very visibly the government when it comes to bank monetary policy. Any claim that world economies are anything like the markets Adam Smith envisioned would be completely thrown out the window after 2008. They were already on very tenuous grounds. Or maybe another way to look at it this: the invisible hand of force is yet another invisible hand operating in the markets.
memefrog 3y ago
Competition relies on the ability for new players to enter the market. That's very difficult in highly regulated industries like banking. Some of those regulations exist for good reasons. Many of them are not. For example, there is no evidence that the US-pushed anti-money-laundering rules that every country has been essentially forced to adopt have resulted in any reduction of criminal activity, anywhere, ever. I'm not exaggerating when I say that. Nobody has ever demonstrated their effectiveness in stopping crime, which was what we were told they would do. And they're a huge compliance cost for banks, worldwide. It's not really fair for the state to impose huge regulatory hurdles that make competition impossible and then for leftists to go 'hurr but what about the invisible hand meme now???', when that obviously relies on FREE MARKETS, which we increasingly do not have.

LatteLazy 3y ago

That depends what you mean by customers and "gouged". The vast majority of deposits come from companies and ultra wealthy individuals. Your average human customer is a borrower. You also have to remember the regime we were and are in: 2 years ago, banks borrowed or paid depositors .5% and charged borrowers 1%. A shitty .5% gross margin. Now, if they borrow at 4% and charge 6% that's 4x the return (2% Vs .5%). But it's also (a) move average historically and (b) smaller as a spread.