America will soon see a wave of bank mergers? • Hacker News Board

Re: America will soon see a wave of bank mergers?

#151

Post by SilasX » Tue, May 02, 2023, 5:14 PM UTC

oarsinsync wrote: post #113

bradleyjg wrote: post #92

Earlier quoted context omitted.

Banking is fundamentally broken. People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans. Of course because we live in times where no one can tell the people that wha…

> People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. > It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans That was true when we lived with 0% interest rates. Now, there’s no reason why a narrow bank couldn’t take…

We have that, that's called a (federal) money market mutual fund.

Edit: sorry, you said the Fed, which MMMFs don't put money in. But they buy short-term Treasurys at comparable or better yields, which is ultimately what you want, modulo the risk of US government default, which is minimal.

Re: America will soon see a wave of bank mergers?

#152

Post by omgomgomgomg » Tue, May 02, 2023, 5:18 PM UTC

Why exactly should banks be private companies at all?

Theyre just skimming middle man between the government and end consumer.

Sure, the government would know your bank balance and spendings, but that could be worked around

If youre in trouble with the irs or the law, the government will have all the insight they request.

Sounds crazy? We the people had to bail them out and never get anything of their profits.

Too big to fail? As in systemic risk?

Well, only the state should be too big to fail.

And if they fail, the fdic needs to cover, also tax payer funded.

Any input is appreciated. I know the interest rate should be set by banks and not the politicians, but yeah, is that really it?

Addendum, this post has triggered an interesting discussion, it appears I am not alone with my thoughts.

So far, I do not see any ovewhelmingly convincing argument on why the banks shouldnt be run by the government. It doesnt have to be senate, it can be something relatively neutral like the irs.

Re: America will soon see a wave of bank mergers?

#153

Post by vkou » Tue, May 02, 2023, 5:19 PM UTC

graeme wrote: post #138

oarsinsync wrote: post #113

Earlier quoted context omitted.

> People want zero risk, demand deposits that pay interest. There’s no business model that can provide that. > It would be perfectly possible for a business to provide zero risk demand deposits—-but the business would have to charge customers for its custodial operations rather than making money by writing loans That was true when we lived with 0% interest rates. Now, there’s no reason why a narrow bank couldn’t take…

You left out “zero risk” Banks have always been able to fail, then you lose the deposits. What people are now asking for is unlimited insurance, which encourages risk takings amongst banks

> What people are now asking for is unlimited insurance, which encourages risk takings amongst banks

Except that when a bank is liquidated, the shareholders get zeroed out, and the executives get their money clawed back, which encourages banks to not risk-take.

As a depositor, this sounds fine to me. I don't benefit from banks doing stupid, risky things, and I shouldn't suffer from it either. Raise the capital requirements. Zero out the shareholders when things go pear-shaped.

Re: America will soon see a wave of bank mergers?

#154

Post by kiawe_fire » Tue, May 02, 2023, 5:20 PM UTC

JohnFen wrote: post #142

lockhouse wrote: post #86

Earlier quoted context omitted.

Hard disagree, the federal government already has too much power. Giving them that sort of access and direct control over personal financial assets would be widely abused. The government and those who work for them are not your friends. The power you give them can and will be abused and will never be returned to the people without great difficulty and probably bloodshed.

> The government and those who work for them are not your friends. Neither are corporations. Both will abuse you. The difference between the two is that you have at least a chance of altering how government works, but you have no chance with a corporation.

They both have highly imperfect avenues with which we can exert influence, but one has more power to compel you to support them legally “or else”.

Re: America will soon see a wave of bank mergers?

#155

Post by bradleyjg » Tue, May 02, 2023, 5:23 PM UTC

runnerup wrote: post #119

bradleyjg wrote: post #110

Earlier quoted context omitted.

That’s still positive. If they want no risk, that number needs to be negative to cover the costs of holding and moving money around.

It really doesn’t. They charge plenty of fees to plenty of customers. They also use daily banking as a loss-leader for profitable services like loans. Chase collected $1.25 billion in overdraft fees alone last year. My “Chase College” account currently gets charged $6/month for some reason I haven’t bothered figuring out, maybe a newly instated minimum balance or direct deposit requirement that wasn’t there years ago…

Great, so if it really doesn’t already, let’s just get rid of the pretense. Make it illegal to offer demand deposits while taking risks with depositors’ funds. No more need to worry about bank runs.

Re: America will soon see a wave of bank mergers?

#156

Post by 20after4 » Tue, May 02, 2023, 5:24 PM UTC

lp0_on_fire wrote: post #33

wesapien wrote: post #16

Earlier quoted context omitted.

You guys should be flipping cars when bank execs didn't get jail time for the financial crisis

Occupy Wall Street was the beginning of that but the media and their allies in the government decided to push for a race war in the 2012 election. It’s not a coincidence the oppression Olympics were turned up to 11 at that time. That’s not to say that there aren’t issues with race in America but they pale in comparison to the socioeconomic ones. A nation obsessed over race and culture has little time to confront othe…

And most people are oblivious to this simple observation, allowing the situation to continue. Feels like the war is already lost a long time ago.

Re: America will soon see a wave of bank mergers?

#157

Post by HissingMachine » Tue, May 02, 2023, 5:25 PM UTC

omgomgomgomg wrote: post #152

Why exactly should banks be private companies at all? Theyre just skimming middle man between the government and end consumer. Sure, the government would know your bank balance and spendings, but that could be worked around If youre in trouble with the irs or the law, the government will have all the insight they request. Sounds crazy? We the people had to bail them out and never get anything of their profits. Too bi…

Governments are even worse than banks with money, if they were private companies every government would be bankrupt ages ago.

Re: America will soon see a wave of bank mergers?

#158

Post by kornhole » Tue, May 02, 2023, 5:26 PM UTC

omgomgomgomg wrote: post #152

Why exactly should banks be private companies at all? Theyre just skimming middle man between the government and end consumer. Sure, the government would know your bank balance and spendings, but that could be worked around If youre in trouble with the irs or the law, the government will have all the insight they request. Sounds crazy? We the people had to bail them out and never get anything of their profits. Too bi…

Yes banks should be better regulated to avoid letting them make risky moves. That aside, many regional banks rather than a centralized government controlled bank is critical to our freedom. Government controlled banks or CBDC will give government total surveillance and control over us since you cannot do much without money.

Re: America will soon see a wave of bank mergers?

#159

Post by kiawe_fire » Tue, May 02, 2023, 5:26 PM UTC

prasadjoglekar wrote: post #39

wesapien wrote: post #16

Earlier quoted context omitted.

You guys should be flipping cars when bank execs didn't get jail time for the financial crisis

That was what Occupy Wall St and Tea Party movements were. Remember that? Before each of them got infested with social-issue parasites of each pole, both were populist reactions to financial injustices.

At some point, it starts to feel intentional that every time an issue that could bring us together begins to gain traction, it’s diverted into some media concocted idea about how (left wing or right wing group) is out to destroy (social thing).

Re: America will soon see a wave of bank mergers?

#160

Post by golergka » Tue, May 02, 2023, 5:26 PM UTC

omgomgomgomg wrote: post #152

Why exactly should banks be private companies at all? Theyre just skimming middle man between the government and end consumer. Sure, the government would know your bank balance and spendings, but that could be worked around If youre in trouble with the irs or the law, the government will have all the insight they request. Sounds crazy? We the people had to bail them out and never get anything of their profits. Too bi…

There's no "should" because there's no high authority in humanity which decides what should and shouldn't exist. Banks exist because some people want to found banks and then other people want to use their services. The only way to prevent this from happening is to threaten violence or threat of violence to either of these people.

The better question would be, why would anyone use violence to force his opinion on other people.