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Politics : View from the Center and Left
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To: ryanaka who wrote (377997)7/23/2018 1:10:15 PM
From: Sun Tzu  Read Replies (3) of 542946
 
That is a common misunderstanding. Banks don't make their money based on the interest rate. They make their money based on the *difference* between their borrowing cost vs their lending. This delta remains fairly constant. On the other hand, high interest rates lower the demand for loans, which lowers their sales volume (while keeping the margins the same) and result in a net *lower* profits.
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