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> Banks, for instance, don't just co-mingle customer funds, they invest those funds on their own behalf and reap the profits for themselves. Sometimes a bank wi
by vasco 3y ago
> Banks, for instance, don't just co-mingle customer funds, they invest those funds on their own behalf and reap the profits for themselves. Sometimes a bank will share a portion of its profit with its customers, in the form of intest; more often, the bank pays little or no interest, and actually charges the customer fees. A bank will risk its customers' money, and its customers will pay for that privilege.
Banking has not worked like this in quite a few years.
- KRAKRISMOTT 3y agoIs Glass Steagall still a thing?
- JohnFen 3y agoSadly, no. It was repealed in 1999.
- 5ersi 3y agoFractional reserve banking is exactly how this works, albeit banks do not "invest" the customers' money, instead they lend it.
- legutierr 3y agoWhat is a loan but an investment? What is government debt? What are mortgage backed securities? The investments that banks can make are restricted, but it is not inaccurate to call them investments.