Mar 27 2009, 10:10 PM
QUOTE(gkl83 @ Mar 25 2009, 08:54 AM)
97/98 recession, managed to hit 8%+ for FD and 10%+ BLR...
weird that 08/09 recession were upside down...
any clues about it?
govt. want you to spend money to push the economy forward, by giving low interest you may not be interested to keep money in the bank weird that 08/09 recession were upside down...
any clues about it?
furthermore inflation is more than interest rate so net return keeping money in the bank could be negative
so spend your heart out
Added on March 27, 2009, 10:13 pm
QUOTE(lwb @ Mar 25 2009, 02:19 PM)
what you've illustrated is overly simplistic.. to begin with, spend some time to understand how a retail bank operates (as opposed to other financial entities)..
it's not entirely correct to say that deposit money to a retail bank is a burden.. (where do you get this silly idea in the first place?). you may've looked at it on the perspective of revenue margin alone to hatch this idea, but a deposit from a customer serves more than just a burden/deposit..
the lender(aka bank) relies on leveraging inorder to lend out money. bank can't simply just create money out of thin air and lend it out. federal regulations requires a statutory provisioning or an amount of money set aside in order to secure this lending to the customer..
in summary.. without a single deposit, a bank can't lend out money.
it's not entirely correct to say that deposit money to a retail bank is a burden.. (where do you get this silly idea in the first place?). you may've looked at it on the perspective of revenue margin alone to hatch this idea, but a deposit from a customer serves more than just a burden/deposit..
the lender(aka bank) relies on leveraging inorder to lend out money. bank can't simply just create money out of thin air and lend it out. federal regulations requires a statutory provisioning or an amount of money set aside in order to secure this lending to the customer..
in summary.. without a single deposit, a bank can't lend out money.
bank will give you an umbrella on a sunny day and will take it back when it rains
this is how most bank operate
This post has been edited by kvacks: Mar 27 2009, 10:13 PM
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