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Thread: Do Banking practices hurt economies?

  1. #1

    Do Banking practices hurt economies?

    Do Banking practices hurt economies? We know money is lent out from them which is good for creating businesses. But sometimes these loans can have you ending up paying almost double the original loan value. What are your thoughts on these banking practices? Do they charge fees often too large for their customers to handle?

  2. #2
    Right now loans are at all time lows. This means banks are not taking as much interest as usual and you can get the best deal. Banks are essential to the economy and so is lending, but right now lending isn't going on as much as it used to.

  3. #3
    Quote Originally Posted by Derrick View Post
    Right now loans are at all time lows. This means banks are not taking as much interest as usual and you can get the best deal. Banks are essential to the economy and so is lending, but right now lending isn't going on as much as it used to.
    Banks could be more competitive don't you think? They are able to mark up loans with very high interest rates with little competition and rake in some serious profits. I would like to see more alternatives to the big banks high rates

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    Quote Originally Posted by Andrew View Post
    Banks could be more competitive don't you think? They are able to mark up loans with very high interest rates with little competition and rake in some serious profits. I would like to see more alternatives to the big banks high rates
    Banks have been the main way to get started with loans and that kind of thing. These very low interest rates are not by the banks but by the central bank. I think it is a bad sign for the economy to have the interest rates this low. Who knows what could happen from here on out.

  5. #5
    Quote Originally Posted by Inspires33 View Post
    Banks have been the main way to get started with loans and that kind of thing. These very low interest rates are not by the banks but by the central bank. I think it is a bad sign for the economy to have the interest rates this low. Who knows what could happen from here on out.
    The interest rates are artificial. These are set up by the Federal reserve bank. The rates are kept low due to the economy but this is only a temporary heal and there are negative side-effects. For example: low bond yields.

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    Banks charged customers fewer overdraft fees in 2011 that in 2010. However, on an average, the fees were higher. The financial research firm Moebs Services released the findings in its latest yearly survey of the overdraft market. You can avoid an overdraft fee if you use an installment loan, which is cheaper most of the time. Just like what I did.

  7. #7
    Yes it effects.

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    Reckless banking practices did not help the economic situation either. Many U.S. banks in the early 1900s were little better than the fly-by-night banks of the 1800s, especially in rural areas of the West and South. Because virtually no federal regulations existed to control banks, Americans had few means of protesting bad banking practices. Corruption was rampant, and most Americans had no idea what happened to their money after they handed it over to a bank. Moreover, many bankers capitalized irresponsibly on the bull market, buying stocks on margin with customers’ savings. When the stock market crashed, this money simply vanished, and thousands of families lost their entire life savings in a matter of minutes.

  9. #9
    Junior Member mark.1's Avatar
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    Yes it badly effects economics. Because banks deals with profit, interest. What i think is that banks charge interest at every step. When you withdraw money Banks charge interest when you invest money banks charge interest when you take loan that means you will have to be charged double against that loan. The conclusion is that Banks effects Economy badly.
    Last edited by mark.1; 10-15-2012 at 06:27 AM.

  10. #10
    Yes. It does practically hurt the economy. But it depends on the changes of profit and interest rates of the respective bank. Banks play a major role to support the economy of any nation. So any financial banking crisis can hit the whole nation leading to increase of charges.

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