This is unreal. The 2010 Dodd-Frank financial regulation monstrosity is now killing deposits that are not insured by FDIC. Because the deposits might be withdrawn quickly, banks must hold so many assets to back them that it is unprofitable to accept those deposits. Banks are urging some of their largest customers in the U.S. to take their cash elsewhere or be slapped with fees, citing new regulations that make it onerous for them to hold certain deposits. The new measure, finalized in September, as well as some other recent global regulations, are designed to make banks safer by helping them manage sudden outflows of deposits in a crisis. The banks are required to maintain enough high-quality assets that could be converted into cash during a crisis to cover a projected flight of deposits over 30 days. Because large, uninsured deposits would be expected to leave most quickly, the rule will now require that banks maintain reserves that they cannot use for profitable activities like making loans. That makes it much less efficient or profitable for banks to hold these deposits. wsj/articles/banks-urge-big-customers-to-take-cash-elsewhere-or-be-slapped-with-fees-1418003852
Posted on: Tue, 09 Dec 2014 14:44:37 +0000
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