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US banks warn Fed interest cut could force them to charge depositors

US banks warn Fed interest cut could force them to charge depositors

By Tom Braithwaite and Stephen Foley in New York | Robin Harding in Washington

November 24, 2013 7:00 pm

Leading US banks have warned that they could start charging companies and consumers for deposits if the US Federal Reserve cuts the interest it pays on bank reserves.

Depositors already have to cope with near-zero interest rates, but paying just to leave money in the bank would be highly unusual and unwelcome for companies and households.

The warning by bank executives highlights the dangers of one strategy the Fed could use to offset an eventual “tapering” of the $85bn a month in asset purchases that have fuelled global financial markets for the last year.

Read more: http://www.ft.com/cms/s/0/b1d409d0-5399-11e3-b425-00144feabd...

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I think right now, banks are

I think right now, banks are struggling to earn money. With interest rates so low, the interest the Fed pays on excess reserves is a valuable form of profit for them.

The thing is, banks may need to readjust how much profit they are making. Maybe 20-30% going towards capital (profits to shareholders/savings) is a little too much.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

And this will not cause a cash bankrun how?


DJP333's picture

Banks already do this

in other countries. I'm sure they have been waiting for the right time to implement this in the USA.

"It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different." ~CW

Encouraging people to remove their assets from banks

doesn't sound like a bad idea to me.