Why Banks are Making Less Money 2

Previously in Transcendental Generalization, I discussed why banks have been making less money recently.

Today, there is a nice article in the Motley Fool on this subject:

Banks have been beaten down this year, and for good reason. The yield curve (the difference between the interest rates of short- and long-term bonds) has been tightening, which simply means that a bank's cost of raw material (money) is rising while the prices it can sell its finished goods (loans) are relatively flat.

Tags: Business

Updated at: 14 October 2005 2:10 PM

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