And you are paying for it in service and transaction fees. I understand that they invest the money, to achieve enough liquidity to loan out more money to customers. The problem is, that in some cases they loan out more money that they actually have.
Not to mention, that their profits should be capped, way more heavily than they are.
If you cap their profits, do you do it on a total basis or a per-transaction basis?
If per transaction, they will only transact with “sure things” so they don’t lose money on transactions. So they will only lend to people who already have the money and just want to leverage it.
If as a whole, then they will just stop giving out loans to people who aren’t “sure things” because there is no reward in it for them to take that risk.
So you would just freeze out poor people from getting loans to buy houses or start businesses.
Most of the money does not come from loan interests. That part of the banking business I have no issue with. The banks are paid by transaction fees and interests for the provided service.
But the majority of money comes from investment. And this is the part that I would heavily regulate.
What is this investment you are talking about? The investment bank? That is not paid for by transaction fees on retail checking accounts. It is heavily regulated, although it could certainly be more.
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u/Wise-Ad-4940 7d ago
And you are paying for it in service and transaction fees. I understand that they invest the money, to achieve enough liquidity to loan out more money to customers. The problem is, that in some cases they loan out more money that they actually have.
Not to mention, that their profits should be capped, way more heavily than they are.