Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
General Discussion
In reply to the discussion: Study: Mega bank JP Morgan Chase receives a $14 billion annual subsidy from the US government [View all]bhikkhu
(10,707 posts)18. Yes, the "expectation of government support" increases lender confidence
...so the banks can borrow at a lower rate than they would otherwise.
But you must see my point - a given bank might have (as an example) a fixed .005 markup between their borrowing and their lending costs, which would allow them to cover the risk of lending and overhead while still maintaining an operating profit. If the bank borrows at 3.5%, it lends at 4%. If the bank borrows at 4%, it lends at 4.5%, and so on. The rate itself has no effect on income - income is determined by the markup, which is worked out with great certainty and care to provide whatever is needed to keep operations profitable.
Again, the rate doesn't determine income, the markup on that rate does, and that has nothing to do with what Bloomberg is talking about.
Edit history
Please sign in to view edit histories.
33 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
Study: Mega bank JP Morgan Chase receives a $14 billion annual subsidy from the US government [View all]
Ghost of Huey Long
Jun 2012
OP
Unfortunately, 22 "Democrats" joined their ideological allies in the Republican Party.
bvar22
Jun 2012
#25
Study: *taxpayers* give Mega bank JP Morgan Chase a $14 billion annual subsidy.
dixiegrrrrl
Jun 2012
#10
It's a calculated value of the effect of expected government support on the credit worthiness
RB TexLa
Jun 2012
#19
Except the funds aren't being granted in by the government. There are no government funds
RB TexLa
Jun 2012
#33