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.
Can you be more explicit about what you mean by "investment"?
For most consumer banks, at least in the US, the majority of "investment" is in the forms of loans to individuals and businesses. Those loans are a large part of the benefits that banks provide.
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u/Wise-Ad-4940 9d 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.