Financial Times/Laura Noonan and Brooke Masters/3-30-2023
“The end of historically low interest rates was billed as good news for banks, which make more money as the difference widens between what they charge borrowers and what they pay for funding. But recent crises on both sides of the Atlantic show that the reality is more complex, upending the conventional wisdom.”
USAGOLD note: The section under the subhead, “Losses on bond portfolios,” is particularly illuminating. It explains the acute dangers presented by accounting standards that have allowed the banks to build massive underwater bond positions.
