I have stated in the past that the Federal Reserve Board needs to move to a more normalized short rate policy. Its no good and suits no one except the financial elites. ZIRP only robs the poor and pays the elites. Its the ultimate RRH (Reverse Robin Hood).
I have also stated that this is not good for the banks as well. Their net interest margins are collapsing at an alarming rate.
Now we have this.
BNY Mellon to Slap Fees on Some Big Deposits Amid Global Race to Cash
Having a ZIRP is ruinous and completely impotent in a balance sheet recession.
It was just a matter of time before the unintended consequences of the Feds actions reared its ugly head.
Now the banks are charging customers who hoard bank deposits. Granted its only for extreme high net worth individuals but this needs to be taken seriously. When the whole planet sells risk assets and goes to cash and short rates are almost negative, something has to give. The Banks pay the FDIC 10 basis points for deposit insurance and short rates grow at 13 basis points. Its just not worth it for the banks as you can see.
So technically the banks cant make money at zero rates. This is truly the Frankenstein monster that Ben Bernanke has created.
Yes People! This is our banking sector and economy.
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