"No, Regulation Is Not Keeping Banks From Making Money"

[applegrove]

No, Regulation Is Not Keeping Banks From Making Money

by Ben Walsh at the Huffington Post

http://www.huffingtonpost.com/2014/11/11/bank-regulation-profits_n_6140510.html

"SNIP.........................



It might be true that, without financial reform, banks could be making even more money. But the idea that banks must make as much or more money than they currently do to help the U.S. economy grow, as Bloomberg suggested, is not supported by the facts.

For instance, JPMorgan Chase, the biggest bank in the U.S. by deposits, has been doing relatively less and less of the kind of lending that supports economic growth, precisely as its profitability has soared. In 2008, the bank lent out just under 75 cents for every dollar of deposits it took in. It is now lending out 56 cents on the dollar.

Though JPMorgan's deposits have ballooned, the most profitable investments for it to make with those deposits aren't loans, but instead things like credit derivatives. In fact, with interest rates as low as they are, more lending might mean lower bank profits.

Contrary to Bloomberg's comments, banks are making plenty of money in spite of new regulations. And they are increasingly making their profits from activities that have little to do with job creation and building infrastructure.



..........................SNIP"

[Scuba]

1. Yeah, but regulations are keeping banks from stealing money and to banks, that's the same thing.

[leanforward]

2. Pro exporting money too!

Thanks for sharing this financial observation. In a nut shell, they are taking from the neighbor without reinvesting in the source. Seems to be exporting upstream to the 1% and then avoiding taxes by parking the funds off shore.