Take This Cash and Shove It
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Bank regulators want big banks to accept the billion of deposits flooding into them and shut up about it. The banks want something in return.
In light of Europe's debt crisis and plunging stock prices, banks have seen cash deposits surge. While these temporary deposits can be disruptive and unprofitable for the banks, U.S. regulators want the banks to take the deposits anyway, Bloomberg reported Friday. One lender has already accepted $100 billion in deposits.
With short term interest rates so low, the sudden surge in deposits aren't great bets for the banks as it forces them to raise capital for growing balance sheets and pay higher deposit insurance. In return for taking the deposits, some of the larger banks are asking regulators to soften rules for ratios that measure capital and assets.
Bank of New York Mellon Corp. (NYSE: BK) recently raised eyebrows after they tried to recoup the costs of the surging deposits by raising fees. This action could have forced regulators to act to keep the financial system stable.
You can read the full article at Bloomberg.com.
In light of Europe's debt crisis and plunging stock prices, banks have seen cash deposits surge. While these temporary deposits can be disruptive and unprofitable for the banks, U.S. regulators want the banks to take the deposits anyway, Bloomberg reported Friday. One lender has already accepted $100 billion in deposits.
With short term interest rates so low, the sudden surge in deposits aren't great bets for the banks as it forces them to raise capital for growing balance sheets and pay higher deposit insurance. In return for taking the deposits, some of the larger banks are asking regulators to soften rules for ratios that measure capital and assets.
Bank of New York Mellon Corp. (NYSE: BK) recently raised eyebrows after they tried to recoup the costs of the surging deposits by raising fees. This action could have forced regulators to act to keep the financial system stable.
You can read the full article at Bloomberg.com.
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