How Banks are Being Squeezed by Interest Rates
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ON BY Ken Tumin
With short-term rates being higher than many long-term rates, profits at banks are being squeezed. This Washington Post article has an overview of this issue. According to the article, it's affecting the smaller banks more since they tend to have less diversified sources of income. Some banks have been loosening up their credit standards to compete. This may increase the trend that banks are already seeing in which borrowers are failing to make payments. You have to wonder if we'll see more bank failures in the near future. Just remember to stay within the FDIC limits for your deposits. Please refer to my Facts about FDIC and NCUA post for more info.
Thanks to the reader who emailed me this article.
Thanks to the reader who emailed me this article.