Banks are supposed to make money through the interest rate differential. However, as we have seen, interest rates are manipulated so frequently by the Central banks that they can no longer appropriately forecast their profit expectations.
Is that the reason why they charge so many commissions and hidden charges for their services to customers?
Art transcends ideology.
http://mises.org/Community/blogs/ruben
I'd say the reason is to make a profit
In the begining there was nothing, and it exploded.
Terry Pratchett (on the big bang theory)
Even in a free market wouldn't interest rates be fundamentally unpredictable since the future is uncertain. Couldn't the arguement be made that a controlled interest rate would be less unpredictable.
Andrews Environmental Management
Rubén: Banks are supposed to make money through the interest rate differential. However, as we have seen, interest rates are manipulated so frequently by the Central banks that they can no longer appropriately forecast their profit expectations. Is that the reason why they charge so many commissions and hidden charges for their services to customers?
Central Banks dont "set" interest rates, they set a target interest rate which they try to accomplish through open market operations. Banks charge so many commissions so that they can make money, because honestly thats the only reason to open any business in the first place. If banks were not trying to make money every way they can I would be scared.
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