How will banks survive deep NIRP?

Discussion in 'Economics' started by babyjake1961, Mar 28, 2016.

  1. Rightly so... Deposits above the FDIC-insured limit are at risk, as well they should be. I have absolutely no idea how that leads you to expect banks to take bigger risks.
     
    #11     Mar 28, 2016
  2. zdreg

    zdreg

    upper management will not lose their jobs, so they will take big risks.
     
    #12     Mar 28, 2016
  3. Right now, there aren't many ways for banks to make profits besides charging their customers fees and riding the stock bubble with the Fed's free money. Well, that bubble is about to burst and the NIRP will further chop off their profits - by making them pay interest on excess reserves and lose depositors en masse once the banks decide to charge their savings accounts. That, in turn, will accelerate the bank stocks sell-off. Cyprus-style bail-in has been rightly mentioned here - NIRP in itself will be a form of bail-in leading to more bail-in for those who were late with taking cash out of their savings accounts.
     
    #13     Mar 28, 2016
  4. Whatever you say, gentlemen...
     
    #14     Mar 28, 2016
  5. I'm really curious to hear the reasoning behind other viewpoints. "Empirical evidence" proved worthless in 2008. The talking heads will produce any "empirical evidence" in any quantities as long as they can keep their payroll in return.
     
    #15     Mar 28, 2016
  6. zdreg

    zdreg

    under a bail-in the banks confiscate your deposits and the government rubber stamps it. it has nothing to do with fdic.
     
    #16     Mar 28, 2016
    babyjake1961 likes this.
  7. best way to fight it is takeout a ton of low interest rate loans and buy assets that FOMC props up.
     
    #17     Mar 28, 2016
  8. There's already a long line for those loans ahead of you comprised of the "eligible financial institutions"..
     
    #18     Mar 28, 2016
  9. Well, of course it has something to do with FDIC, don't be silly... Up to a certain amount deposits are insured by the FDIC. As to the bail-in, it's not the bank that confiscates your deposit, obviously. As the bank is bankrupt at that point. Whoever is administering the estate (ultimately, the court) will be responsible for dealing with the creditors, including the depositors who are not FDIC-insured.
     
    #19     Mar 28, 2016
  10. Huh? Empirical evidence is not produced by "talking heads". It's called empirical, since it is based on actual observed facts.

    As to being curious, you seem to know exactly what the future holds, so I am really not sure there's any point talking about it.
     
    #20     Mar 28, 2016