![]() The difference between the nearly zero that it pays for our deposits and what it gets back from borrowers forms the majority of the bank’s profits. ![]() JPMorgan Chase then takes this raw material-our deposits-and lends that money out for five, seven, or 10 years or more, at much, much higher interest rates, plus all of those fees. (It’s hard to find an industry besides depository banking for which that is true.) In other words, JPMorgan Chase gets its raw material for very close to free. This is one of the resources the bank uses to make loans to generate revenue. JPMorgan Chase has something like $2.5 trillion in total deposits. The difference between what a bank pays us for our deposits and what it receives in interest payments and assorted fees from borrowers of all sorts is, essentially, one of the important ways the bank makes a profit.įor instance, my own bank, JPMorgan Chase, pays me one basis point of interest on my checking account each year (0.01 percent), and two basis points (0.02 percent) on my savings account-practically zero. To anyone, in fact, who can meet required credit standards and has the wherewithal to pay for the borrowing in the form of fees, interest, and principal payments. That’s the essence of “fractional banking.” The way a bank makes money-and American banks primarily are private, profit-seeking enterprises-is by taking our deposits and then lending that money out to individuals, companies, universities, and municipalities. But the majority of the money we deposit in banks is not kept in the banks’ vaults. Some of our cash is at the bank all the time, and, of course, we can always withdraw $100 here or $200 there. In theory, we’re safe to assume this will be so. When we deposit the after-tax proceeds of our salaries into a bank, we like to think we have put the money in a safe place and that it will always be there for us when we go to the ATM machine and want some of it back. ![]() Our so-called fractional banking system is fundamentally risky and vulnerable to external shocks, like the recent rise in interest rates, which these banks’ managers should have anticipated-but evidently had not. ![]() What’s going on? Why did these three previously solid, medium-size banks suddenly face annihilation? The answer lies in the nature of banking itself. When First Republic fails and is seized by the FDIC, as is widely expected to happen, it will replace SVB as the second-largest bank failure in American history. In February, the bank’s stock was trading for $147 a share it’s now about $3.50, a decline of 98 percent. This weekend, First Republic Bank, with $233 billion in assets, is anticipated to meet its demise. That was the third-largest bank failure in American history. Two days after the SVB disaster, the little-known Signature Bank, which had about $100 billion in assets, also failed. Only the failure of Washington Mutual, which had more than $300 billion in assets when it went under in September 2008, was larger. It was the second-largest bank failure in American history. If you want to read books on your computer, Epubor Reader is an effective software for doing so.In March, Silicon Valley Bank, once the envy of the nation’s tech elite with more than $200 billion in assets, went down the tubes in a flash-pretty much 36 hours from start (rumors of its insolvency) to finish (the announcement of a takeover by the Federal Deposit Insurance Corporation). It's free to use and safe to install, no plug-ins or advertisements built in.Įpubor Reader takes short time to open an eBook, and the speed is very fast when you scroll pages, even for eBooks with thousands of pages. It supports a lot of ebook formats, such as ePub, PDF, Mobi, AZW3. It is specially designed for eBook readers and will let you focus on reading.You can easily read all your eBooks with Epubor Reader, no matter they are puchased from Kindle or Kobo, B&N, iBooks, Goolge Play Books. When read an eBook with Epubor Reader, you can easily increase or decrease the font size to your comfort, just click the zoom in or zoom out button to get the best reading experience.It also has well organized table of content which let your reach the specific pages and chapters of the eBook.Įpubor Reader has a simple and clean interface. It also supports: AZW, AZW3, AZW4, PRC, TXT, HTMLz, TPZ, Topaz. Epubor Reader enables you to read ePub, PDF, Mobi ebooks in one application on computer, it's convenient for readers who have multiple formats of eBooks.
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