Wall Street Protestors

This shows an unawareness of, or disregard for, how markets work. Most banks are charge similar fees and have similar pricing structures, precisely because they operate in a market. They have found a market equilibrium, in which one bank can't undercut the others without losing overall revenue, and other banks can't charge higher fees without losing revenue by costing themselves customers. There is plenty of competition in the commercial banking area. If I run Chase, and I can somehow boost volume of loans enough by charging a lower interest rates, OF COURSE, I am going to do it. But that isn't possible, because everyone is already maximizing their revenue by charging an equilibrium price, where the mix of rates plus consumers in at those rates brings in the most money. Anyone in business finds that price point that maximizes revenue.

All businesses operate that way. They have competitors. They price things in a way that takes into account that competition. "If I raise prices, as much as I would love to, I risk losing more business than I make up from the higher prices." "If I lower prices, I may get more customers, but the lower margins will lead to decreased revenues." It's why unless you have some competitive advantage that allows you to shave costs in a way that your competitors can't, prices in competitive businesses tend to be similar -- for example, in commercial banking.

Name your area of commercial banking. You have your choice of dozens of companies offering credit cards. Dozens of places to open your money market account. Dozens of places to get a checking account. These are highly competitive busineses, and each prices their services in a way that takes into account their competition, what price point can maximize revenue (and hopefully profits), and in the case of things like lending, risk.

Now you get the Federal government stepping in (and mind you, this plays into my earlier post about special interest, because Dodd-Frank was special-interest driven) and putting price ceilings on what businesses can charge. The end result isn't surprising. It messed with that equilibrium, and now is costing consumers, as banks find other ways to make up the revenue government took away from them.

 

I disagree with you. They are just corporations. That is all they are. Corporations beholden to their shareholders. The rest of it: The politicians pointing fingers at them; the rhetoric from them about regulation and how they'd loan if only. ... ; your posts about greed and selfishness, as subjective criteria as those are; it's just senseless noise. Bank of America doesn't owe me anything. And frankly, I am glad for that, because I don't think it is going to survive another year. At least I give it less than a 50/50 shot. Maybe this time around we don't get more special interest cronyism from our government, and we let BofA and Morgan Stanley and any others that don't have viable businesses to go by the wayside rather than handing out unfair favors that add to our debt. Banking can be a great business--if you have the ability to minimize risk and maximize profits. A lot of the largest banks in the world have failed miserably at the minimizing risk problem, whether it was CDOs on mortgages or exposure to sovereign debt that presupposed that the global economy would continue to expand infinitely.

There are plenty who can manage their risk better, and will do it better than the ones that have failed. We should just let it happen. The same way any business that mismanages itself goes out of business.

But this notion that any of these companies owes use anything? They are in business to earn a profit. And somehow, because of attitudes like the one you expressed in your post, they get put in the position of apologizing for trying to do it.