Have banks now got too much cash? | The Economist

Have banks now got too much cash?

Some are in the bizarre position of shooing away deposits

THE FATES of the economy and banks are normally closely entwined; when customers endure misfortune, loans go unpaid. The summer was marked by a lull in covid-19 cases and recovering economic activity. Winter has brought with it more infections and shutdowns. Yet banks' profits were slender in the summer and, as fourth-quarter earnings released between January 15th and 20th revealed, fattened at the end of the year. What is going on?

One explanation is that the trading desks and investment banks housed in most big banks have fared well, thanks to a rush of initial public offerings and booming markets. Profits were sky-high at banks that earn most of their revenues from investment banking and trading. Goldman Sachs made $4.5bn in the fourth quarter, half its annual profits in 2020. JPMorgan Chase's investment-banking profits in the same quarter almost doubled on the year. The firm's total earnings were a record $12.1bn in the fourth quarter.

Live News Feed

News Feed featuring the top articles in the finance world from global publications such as Financial Times and the Economist.

Click here to view

Powered by © Neon Accelerator

From the Web

Railroads Strike a $25 Billion Merger | The Wall Street Journal

| From the web

Canadian Pacific agreed to acquire Kansas City Southern in a merger valued at about $25 billion that would create the first freight-rail network linking Mexico, the U.S. and Canada.

Read More >

Warren Buffett Would Say Do This With Your $1,400 Stimulus Check | MoneyWise

| From the web

The billionaire isn't getting a payment, but he has a strong opinion on how to use yours.

Read More >

A Fed With No Fear of Inflation Should Scare Investors | The Wall Street Journal

| From the web

Markets are only just waking up to the implications of an important shift in Federal Reserve policy.

Read More >

As Blackstone Barrels Toward Trillion-Dollar Asset Goal, Growth Is In, Value Out | The Wall Street Journal

| From the web

Jonathan Gray, Blackstone Group’s day-to-day leader, is guiding a shift at an investment powerhouse that made its name buying into undervalued companies.

Read More >
Go to Top