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Business Banking - Account Analysis

 
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Old 12-28-2018, 08:09 PM   #21
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Re: Business Banking - Account Analysis


Bull Trout: Some investment accounts with limited "checking" privileges ARE NOT insured if the institution fails.....

Products that aren't traditional bank accounts.
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Old 12-29-2018, 03:31 PM   #22
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Re: Business Banking - Account Analysis


Chase is free to veterans/service members. They've been good to bank with.
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Old 12-29-2018, 07:01 PM   #23
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Re: Business Banking - Account Analysis


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Originally Posted by Bull Trout View Post
mostly yes, banks have FDIC insurance credit unions NCUA both cover $250k, if I remember right with banks you can have multiple accounts covered at the same bank, depending on how they are set up and with NCUA it is limited to the $250k per member no matter how many accounts
I don't think this reply was for me.....
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Old 12-31-2018, 07:31 PM   #24
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by Randy Bush View Post
I have been with Wells Fargo for over 25 yr, or banks they bought out, only cost me $ 3.50 a month Get statement each month with check images. Know a lot of people don't like them , but they have done right by me so far.
I have been using Wells Fargo for about 20 years, write about 150 to 200 checks per month and I think my fee is also $3.50 per month plus another $3 for something else.

Also, there are a lot of reasons to hate Wells Fargo since the CEO's ripped people off for something like $350 million and did no jail time. The bank is also notorious for looking at the amount of money in accounts , calling their customers and then make investment suggestions. These calls make me furious and a feeling of being violated. I opened more than 20 checking accounts with Wells Fargo and their bankers always lied and opened up Money Market accounts and gave me debit cards when I said I did not want them. This is because the bank clerks get sales commissions. I only bank with Wells Fargo because I can walk to the bank in less than 10 minutes.

Otherwise, anyone paying more than $15 per month for a checking account is probably paying too much.
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Old 12-31-2018, 10:22 PM   #25
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Re: Business Banking - Account Analysis


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Originally Posted by KAP View Post
Balance rarely under six-figures, you do your direct deposit through them and they've got the balls to charge you $63 for fees? Sounds like they tried it and hoped you wouldn't notice it...



That'd probably be the first thing I say to them and give them the chance to make it right... "Been a customer for many years, have my direct deposit services through you, and my balance rarely drops below six-figures... surely this $63 charge is a mistake, right?"...


The problem with banks anymore 6 figures is a nuasance. It's not like the old days where mom and pops life savings mattered to them. With only the big banks pretty much left due to Dodd Frank they all are now truly "too big to fail". As with everything the Dems touch it always has the opposite effect. Simply put? It's about the control.


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Old 01-01-2019, 05:45 PM   #26
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Re: Business Banking - Account Analysis


If "Too big to allow to fail" exist in the USA/World, (When the largest Business is smaller then 1-2% of the USG...?)

What fools would want a Government that by definition is to big to fail with out destroying our Nation?

When parts of our Bodies get too-big-to -fail, the uncontrolled growth of tumors we have surgeons cut them back radically.
b
When did Bank records stop needing a warrant for the USG to read them?
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Old 01-01-2019, 08:27 PM   #27
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by Fouthgeneration View Post
If "Too big to allow to fail" exist in the USA/World, (When the largest Business is smaller then 1-2% of the USG...?)



What fools would want a Government that by definition is to big to fail with out destroying our Nation?



When parts of our Bodies get too-big-to -fail, the uncontrolled growth of tumors we have surgeons cut them back radically.

b

When did Bank records stop needing a warrant for the USG to read them?


Well said Fouth, we'll said!


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Old 01-01-2019, 08:45 PM   #28
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by Californiadecks View Post
The problem with banks anymore 6 figures is a nuasance. It's not like the old days where mom and pops life savings mattered to them. With only the big banks pretty much left due to Dodd Frank they all are now truly "too big to fail". As with everything the Dems touch it always has the opposite effect. Simply put? It's about the control.


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Their ability to lend is tied directly to their deposits... losing a six-figure account impacts their ability to lend in the seven-figures...

That leverage is worth a lot more than $63/month... it'd be interesting to see a bank manager explain how he lost a six-figure deposit customer who also does his direct deposit business through them over $63/month when that customer gives them the ability to make many times that...

But leverage only works when it's used... be interesting to hear what the end result was...

Last edited by KAP; 01-01-2019 at 10:04 PM.
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Old 01-02-2019, 01:43 AM   #29
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by KAP View Post
Their ability to lend is tied directly to their deposits... losing a six-figure account impacts their ability to lend in the seven-figures...

That leverage is worth a lot more than $63/month... it'd be interesting to see a bank manager explain how he lost a six-figure deposit customer who also does his direct deposit business through them over $63/month when that customer gives them the ability to make many times that...

But leverage only works when it's used... be interesting to hear what the end result was...


Their ability to lend is tied to their assets which are other loans. My deposit isn't their asset.

Why Banks Don't Need Your Money to Make Loans

Quote:
The capacity of bank lending is not entirely restricted by banks’ ability to attract new deposits, but by the central bank’s monetary policy decisions about whether or not to increase reserves. However, given a particular monetary policy regime and barring any increase in reserves, the only way commercial banks can increase their lending capacity is to secure new deposits. Again, deposits create loans, and consequently, banks need your money in order to make new loans.

Banks in the Real World
In today’s modern economy most money takes the form of deposits, but rather than being created by a group of savers entrusting the bank withholding their money, deposits are actually created when banks extend credit (i.e. create new loans). As Joseph Schumpeter once wrote, “It is much more realistic to say that the banks "create credit," that is, that they create deposits in their act of lending than to say that they lend the deposits that have been entrusted to them.”


When a bank makes a loan, there are two corresponding entries that are made on its balance sheet, one on the assets side and one on the liabilities side. The loan counts as an asset to the bank and it is simultaneously offset by a newly created deposit, which is a liability of the bank to the depositor holder. Contrary to the story described above, loans actually create deposits.

Now, this may seem a bit shocking since, if loans create deposits, private banks are creators of money. But you might be asking, "Isn’t the creation of money the central banks’ sole right and responsibility?" Well, if you believe that the reserve requirement is a binding constraint on banks’ ability to lend then yes, in a certain way banks cannot create money without the central bank either relaxing the reserve requirement or increasing the number of reserves in the banking system.

The truth, however, is that the reserve requirement does not act as a binding constraint on banks’ ability to lend and consequently their ability to create money. The reality is that banks first extend loans and then look for the required reserves later. Perhaps a few statements from some notable sources will help to convince you of that fact.

Alan Holmes, a former senior vice president of the New York Federal Reserve Bank, wrote in 1969, “in the real world banks extend credit, creating deposits in the process, and look for the reserves later.”

Vítor Constâncio, Vice-President of the European Central Bank (ECB), in a speech given in December 2011, argued, “In reality, the sequence works more in the opposite direction with banks taking first their credit decisions and then looking for the necessary funding and reserves of central bank money.”

What Really Affects Banks’ Ability to Lend
So if bank lending is not restricted by the reserve requirement then do banks face any constraint at all? There two sorts of answers to this question, but they are related. The first answer is that banks are limited by profitability considerations; that is, given a certain demand for loans, banks base their lending decisions on their perception of the risk-return trade-offs, not reserve requirements.

The mention of risk brings us to the second, albeit related, answer to our question. In a context whereby deposit accounts are insured by the federal government, banks may find it tempting to take undue risks in their lending operations. Since the government insures deposit accounts, it is in the government’s best interest to put a damper on excessive risk-taking by banks. For this reason, regulatory capital requirements have been implemented to ensure that banks maintain a certain ratio of capital to existing assets.

If bank lending is constrained by anything at all, it is capital requirements, not reserve requirements. However, since capital requirements are specified as a ratio whose denominator consists of risk-weighted assets (RWAs), they are dependent on how risk is measured, which in turn is dependent on the subjective human judgment. Subjective judgment combined with ever-increasing profit-hungriness may lead some banks to underestimate the riskiness of their assets. Thus, even with regulatory capital requirements, there remains a significant amount of flexibility in the constraint imposed on banks’ ability to lend.
https://www.investopedia.com/article...make-loans.asp


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Old 01-02-2019, 08:29 AM   #30
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by Californiadecks View Post
Their ability to lend is tied to their assets which are other loans. My deposit isn't their asset.

Why Banks Don't Need Your Money to Make Loans



https://www.investopedia.com/article...make-loans.asp


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You left out the paragraph before...
"Of course, this story of bank lending is usually supplemented by the money multiplier theory that is consistent with what is known as fractional reserve banking. In a fractional reserve system, only a fraction of a bank’s deposits needs to be held in cash or in a commercial bank’s deposit account at the central bank. The magnitude of this fraction is specified by the reserve requirement, the reciprocal of which indicates the multiple of reserves that banks are able to lend out. If the reserve requirement is 10% (i.e., 0.1) then the multiplier is 10, meaning banks are able to lend out 10 times more than their reserves."
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Old 01-02-2019, 10:26 AM   #31
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by KAP View Post
You left out the paragraph before...


"Of course, this story of bank lending is usually supplemented by the money multiplier theory that is consistent with what is known as fractional reserve banking. In a fractional reserve system, only a fraction of a bank’s deposits needs to be held in cash or in a commercial bank’s deposit account at the central bank. The magnitude of this fraction is specified by the reserve requirement, the reciprocal of which indicates the multiple of reserves that banks are able to lend out. If the reserve requirement is 10% (i.e., 0.1) then the multiplier is 10, meaning banks are able to lend out 10 times more than their reserves."


Your left or the title of your quote

Fairytale Banking

HERE'S THE TITLE OF MY QUOTE

Banks in the Real World
In today’s modern economy most money takes the form of deposits, but rather than being created by a group of savers entrusting the bank withholding their money, deposits are actually created when banks extend credit (i.e. create new loans).


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Old 01-02-2019, 12:44 PM   #32
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Re: Business Banking - Account Analysis


We've really had a nice relationship with Fifth Third Bank (53.com) since 2008. And we've never been charged a monthly fee, despite an average balance a fraction of yours.

You may want to check them out if they have branches in your region.
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Old 01-02-2019, 02:48 PM   #33
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by Californiadecks View Post
Your left or the title of your quote

Fairytale Banking

HERE'S THE TITLE OF MY QUOTE

Banks in the Real World
In today’s modern economy most money takes the form of deposits, but rather than being created by a group of savers entrusting the bank withholding their money, deposits are actually created when banks extend credit (i.e. create new loans).


Mike.
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Where do you think their ability to extend credit and at what amount comes from?
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Old 01-02-2019, 11:04 PM   #34
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by KAP View Post
Where do you think their ability to extend credit and at what amount comes from?

From the money they make on loans and servicing loans. My money in their bank isn't their asset.


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Old 01-02-2019, 11:04 PM   #35
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Re: Business Banking - Account Analysis


My home loan that they service is their asset.


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Old 01-02-2019, 11:08 PM   #36
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Re: Business Banking - Account Analysis


The government gives the banks money at .25% interest they sell me a loan at 5%. This isn't complicated.

The Federal Reserve uses the fed funds to control the nation's interest rates. That is because banks borrow fed funds from each other. They pay an interest rate that they call the fed funds rate. ... Banks can also borrow from the Federal Reserve's discount window.


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Old 01-03-2019, 08:18 PM   #37
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by Californiadecks View Post
From the money they make on loans and servicing loans. My money in their bank isn't their asset.


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You're right, it's not complicated... They only get to make loans (i.e. - borrow money) because they have reserves... the amount of loans they can borrow to lend is based on the reserves (%)... again, from your article...

"The magnitude of this fraction is specified by the reserve requirement, the reciprocal of which indicates the multiple of reserves that banks are able to lend out. If the reserve requirement is 10% (i.e., 0.1) then the multiplier is 10, meaning banks are able to lend out 10 times more than their reserves."


Banks have credit profiles too...
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Old 01-03-2019, 11:08 PM   #38
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Originally Posted by KAP View Post
You're right, it's not complicated... They only get to make loans (i.e. - borrow money) because they have reserves... the amount of loans they can borrow to lend is based on the reserves (%)... again, from your article...



"The magnitude of this fraction is specified by the reserve requirement, the reciprocal of which indicates the multiple of reserves that banks are able to lend out. If the reserve requirement is 10% (i.e., 0.1) then the multiplier is 10, meaning banks are able to lend out 10 times more than their reserves."




Banks have credit profiles too...


From my article

What Really Affects Banks’ Ability to Lend
So if bank lending is not restricted by the reserve requirement then do banks face any constraint at all? There two sorts of answers to this question, but they are related. The first answer is that banks are limited by profitability considerations; that is, given a certain demand for loans, banks base their lending decisions on their perception of the risk-return trade-offs, not reserve requirements.

The mention of risk brings us to the second, albeit related, answer to our question. In a context whereby deposit accounts are insured by the federal government, banks may find it tempting to take undue risks in their lending operations. Since the government insures deposit accounts, it is in the government’s best interest to put a damper on excessive risk-taking by banks. For this reason, regulatory capital requirements have been implemented to ensure that banks maintain a certain ratio of capital to existing assets.


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Old 01-06-2019, 12:19 PM   #39
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by Californiadecks View Post
From my article

What Really Affects Banks’ Ability to Lend
So if bank lending is not restricted by the reserve requirement then do banks face any constraint at all? There two sorts of answers to this question, but they are related. The first answer is that banks are limited by profitability considerations; that is, given a certain demand for loans, banks base their lending decisions on their perception of the risk-return trade-offs, not reserve requirements.

The mention of risk brings us to the second, albeit related, answer to our question. In a context whereby deposit accounts are insured by the federal government, banks may find it tempting to take undue risks in their lending operations. Since the government insures deposit accounts, it is in the government’s best interest to put a damper on excessive risk-taking by banks. For this reason, regulatory capital requirements have been implemented to ensure that banks maintain a certain ratio of capital to existing assets.


Mike.
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How Banks Work... https://money.howstuffworks.com/pers...king/bank1.htm

When you deposit your money in the bank, your money goes into a big pool of money along with everyone else's, and your account is credited with the amount of your deposit. When you write checks or make withdrawals, that amount is deducted from your account balance. Interest you earn on your balance is also added to your account.

Banks create money in the economy by making loans. The amount of money that banks can lend is directly affected by the reserve requirement set by the Federal Reserve. The reserve requirement is currently 3 percent to 10 percent of a bank's total deposits. This amount can be held either in cash on hand or in the bank's reserve account with the Fed. To see how this affects the economy, think about it like this. When a bank gets a deposit of $100, assuming a reserve requirement of 10 percent, the bank can then lend out $90. That $90 goes back into the economy, purchasing goods or services, and usually ends up deposited in another bank. That bank can then lend out $81 of that $90 deposit, and that $81 goes into the economy to purchase goods or services and ultimately is deposited into another bank that proceeds to lend out a percentage of it."


If all that was required was profitability to make loans, there would be no need for Deposit insurance or Deposits period to make loans... their ability to borrow to then lend money is directly tied to their deposits... if they don't meet the reserve requirements, no money to lend... their credit rating...
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Old 01-06-2019, 05:15 PM   #40
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Re: Business Banking - Account Analysis


Quote:
Originally Posted by KAP View Post
How Banks Work... https://money.howstuffworks.com/pers...king/bank1.htm



When you deposit your money in the bank, your money goes into a big pool of money along with everyone else's, and your account is credited with the amount of your deposit. When you write checks or make withdrawals, that amount is deducted from your account balance. Interest you earn on your balance is also added to your account.



Banks create money in the economy by making loans. The amount of money that banks can lend is directly affected by the reserve requirement set by the Federal Reserve. The reserve requirement is currently 3 percent to 10 percent of a bank's total deposits. This amount can be held either in cash on hand or in the bank's reserve account with the Fed. To see how this affects the economy, think about it like this. When a bank gets a deposit of $100, assuming a reserve requirement of 10 percent, the bank can then lend out $90. That $90 goes back into the economy, purchasing goods or services, and usually ends up deposited in another bank. That bank can then lend out $81 of that $90 deposit, and that $81 goes into the economy to purchase goods or services and ultimately is deposited into another bank that proceeds to lend out a percentage of it."




If all that was required was profitability to make loans, there would be no need for Deposit insurance or Deposits period to make loans... their ability to borrow to then lend money is directly tied to their deposits... if they don't meet the reserve requirements, no money to lend... their credit rating...


Deposit accounts are a source of income for the banks. Hence the reason they charge your for all the little ****. They make bank (literally) on those bank charges. Deposit accounts used to be more important to banks. Not nearly as much anymore.


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