Facing potential losses if the Fed cuts interest rates, America’s biggest banks have floated a potential new source of income: charging you for depositing your money with them. The warning by banks, the Financial Times reports, highlights the dangers the Fed faces if it cuts the interest it pays on bank reserves “to offset an eventual ‘tapering’ of the $85bn a month in asset purchases that have fuelled global financial markets for the last year.”
Charging individuals and companies to deposit their cash would be a “highly unusual” move, says the FT. It seems like another sucker punch from the banking industry—inventors of the $3 “other” ATM surcharge—that have long been pioneers in sneaky nickel and diming of customers. But, Bloomberg points out taking deposits isn’t an expense-less enterprise for banks.
Offering deposits isn't costless for banks, which have administrative expenses and run much of the infrastructure behind the payments system. Banks also have to pay fees to the Federal Deposit Insurance Corp. commensurate to the value of the deposits they borrow from savers.
TODAY IN SLATE
The World’s Politest Protesters
The Occupy Central demonstrators are courteous. That’s actually what makes them so dangerous.
The Religious Right Is Not Happy With Republicans
How Did the Royals Win Despite Bunting So Many Times? Bunting Is a Terrible Strategy.
Catacombs Where You Can Stroll Down Hallways Lined With Corpses
Homeland Is Good Again! For Now.
How Even an Old Hipster Can Age Gracefully
On their new albums, Leonard Cohen, Robert Plant, and Loudon Wainwright III show three ways.