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America will soon see a wave of bank mergers?

economist.com

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

#251

Post by winkeltripel »

bradleyjg wrote: post #155
runnerup wrote: post #119

Earlier quoted context omitted.

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.

It's almost like the glass-steagal act had a good approach for the average person.

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

#252

Post by mbesto »

passwordoops wrote: post #20

I've said it before, I'll say it again - "too big to fail" should be recast as "too big to exist" I'm not sure what the best solution is here, but making the big banks even bigger is not it. This is just going to make the banking system more concentrated and no concentrated market is good for anyone. Least of all because the past decade+ has set the precedent that the banks will be bailed out... If they're big enough

The solution is simple, the implications are not:

Eliminate the Fed.

Banks eliminate inherent risk by being backstopped by the fed. A simple example of how this works is FDIC insurance. If a bank had all of its depositors holding $250k or less, it could essentially lend out all of that money with very little risk of getting sued by their depositors.

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

#253

Post by tastyfreeze »

lcnPylGDnU4H9OF wrote: post #246
tastyfreeze wrote: post #196

Earlier quoted context omitted.

Sorry, you must not be paying attention or this is sarcasm. Giving the government the keys to your banking data and expecting them to respect rights is naive. Government ownership of data means they don't have to respect privacy because they already own the data. The US government is wholesale spying on the entirety of electronic communications and working with social media sites to make some voices less prominent. P…

So these statements seem to contradict each other: > Government ownership of data means they don't have to respect privacy because they already own the data. > Banks exist as long as they are in the good graces of regulators. So we have this problem that the government doesn't want to respect our privacy and the problem that the government doesn't need to respect our privacy and somehow removing the bank in the middl…

I do not agree that giving government more power over banks is the solution. It may make it obvious to everybody what reality is but you just handed the keys to the entity that is abusing their powers already. Giving the government more power only reduces ours.

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

#254

Post by Invictus0 »

bombcar wrote: post #232
kevinventullo wrote: post #141

Earlier quoted context omitted.

CD’s are not the same thing as demand deposit accounts. They’re less liquid than treasuries.

My credit onion is offering 3.1% on the savings act which is lower but isn't insane.

That's the problem, you need to open an account with a credit shallot instead.

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

#255

Post by 0zemp2c »

willcipriano wrote: post #240
danaris wrote: post #193

Earlier quoted context omitted.

The government would seem to have every recourse to collect.

In a manner of speaking. Take a look at student loans, how have they been intending to collect on those lately?

those loans are being repaid

with votes

Democrats dangled loan forgiveness at the midterms, bought enough votes to blunt a Republican trouncing...never followed through to reward the voters but no worries, the promise can be re-made for the Presidential election

all Biden has to do is offer full loan forgiveness and the election is his

DeSantis will counter with auto loan forgiveness (just as big of a problem now), and it will be a battle to see who can buy more votes

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

#256

Post by 0zemp2c »

no_wizard wrote: post #206
lvl102 wrote: post #91

Earlier quoted context omitted.

What we need is a “boring” banking model where deposits are fully guaranteed by a bank. No lending. In digital age, that should be ridiculously easy to do.

how do you propose they make money to keep the bank open? Charge for accounts? I don't think such a draconian rule is needed here. Free checking is nice. There's nothing wrong with being a low risk lender. Thats not the central problem with the banking system in the US. Its that bigger banks take riskier and riskier bets with money that they really shouldn't be, and when bad times hit they often don't have proper ris…

this is how the Apple bank accounts can work

Apple makes money selling phones, not mortgages

the funds deposited can be reinvested in Apple stock

as long as Apple is not loaning at interest, they could pull it off

I think people are underestimating the blast radius of these accounts...imagine an entity engaged in "fair" banking (and only banking) that is too big and powerful to be undermined by JPM, BofA etc

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

#257

Post by 0zemp2c »

Mistletoe wrote: post #4
cyclecount wrote: post #2

All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…

Am I too tinfoil hat to think the big 4 planned it like this all along? I guess one could ask why WOULDN’T they have meetings trying to engineer exactly what is happening?

yes, and now they are "attacking" PacWest, whose stock is plummeting like First Republic

its an easy cycle - find a bank you want for nothing, feed bad press through the usual outlets, watch it fall, then watch depositors get spooked, then buy it for nothing

First Republic is probably just one of many banks intended to be undermined, trashed, and then sold for nothing

and remember all the times First Republic's CEO came out and defended his business as it was collapsing? me neither...makes you wonder...

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

#258

Post by kneebonian »

brianmcc wrote: post #29
nonethewiser wrote: post #28

Earlier quoted context omitted.

> This is just going to make the banking system more concentrated More concentrated. More highly regulated. Closer to being absorbed by the state. I'm not saying that's necessarily going to happen someday. But that is the direction it is (and has been) moving.

Also closer to absorbing the state. I'm not a tin foil hat person, but corporations growing larger than nation states just doesn't seem remotely far fetched. Which corporation will be first to sit at the UN table?

Obviously either ComStar or the Spacing Guild. But don't worry that doesn't happen until after we have a butlerian jihad.

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

#259

Post by RandomLensman »

WeylandYutani wrote: post #85
vkou wrote: post #81

Earlier quoted context omitted.

... Except that the too-big-to-fail banks are under more stricter capitalization rules than the banks that are failing right now, which is why the small-medium capitalization banks are going through a bloodbath.

I listened to an interview with an expert who explained that the US specifically lobbied that small banks are exempt from Basel 3 regulations. Europe doesn't have 5000 banks they all merged decades ago.

EU has about 5000 banks as well, I think
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