On Mar 22, 2013, at 1:15 PM, Arthur Maisel <arthurmaisel at gmail.com> wrote:
> But isn't a savings deposit the same sort of
> liability to a bank as parts or raw materials are to a manufacturer? In
> other words, a liability but one you can't do business without. I
> understand that bankers might lose sight of this from their vantage on the
> commanding heights, but can they escape it? (Maybe evading it is all they
> need to do?)
Banks know they need deposits, otherwise they have nothing to lend. During and after the financial crisis, banks looked more favorably on retail deposits, because they're a far more stable funding source than relying on short-term hot-money flows. But retail accounts are more expensive to administer, so with recovery, hot money is looking more tempting.
Doug