Source of the image, Getty Images
Some entities have the right to deposit deposits.
Some of JP Morgan’s clients may have recently encountered an unreasonable reaction.
The bank has the trust that will take its money to another party.
According to its executive director Jamie Dimon, the historical investment firm soliciting some of the companies that have the most funds deposited in it as they move to other entities, has reduced its deposit base to $ 200,000 million.
JP Morgan, one of the financial colossi in the United States, is no exception.
‘The bank mayors of the country are inundated with money, almost to the point where some of them have been forced to return deposits and we will see that others will try to do the same’, confirms a conversation with BBC Mundo Nathan Stovall, expert on the S&P Global Finance System .
How did you get to a point where the banks are withdrawing the money? Have you ever lived in it?
What is happening
“It’s a precedent-setting situation. We will never live anywhere else,” Stovall said.
“We live one liquidity crisis in the past. Normally, when there is a recession, the effect is very high and the banks are very aggressive in fundraising. But the crisis provoked by the pandemic is suicidal to the contrary. The banks have demased money where they can benefit. ”
Under normal conditions, the banks will always be able to collect inputs, because they can concede prestamos y obtener un interes. They are interested in the main part of their business.
Pero ese margin of gain has disappeared through a combination of factors related to capital requirements approved during the 2008 financial crisis, the economic wave of the pandemic and the policy of estimates that adopted the United States government to counteract.
Source of the image, Getty Images
The demand for periodic credit to the banks.
To emphatically, the types of interest paid by the Federal Reserve will be maintained on March 0, a media meeting to incentivize the activity and movement of the money that the benefit and debt that the financial entities obtain to perform.
And the demand for credits has been approved. La incetidumbre when it comes to ending the pandemic and improving the economy, it will continue to thrive and its people will now have to study and correct risks.
That’s the sum of them estimates by the governor, which includes from the purchase of emitted bonuses by entities has direct payments to families and businesses, as well as the creation of each more money.
As a result, JPMorgan, Bank of America and Citigroup will collect more than one trillion in deposits in 2020 and the deposit ratio for deposits in cayo units at historical lows, up to 60%.
The levels of ahorro are missing. “People are literally laundering dollars in banks”, hervat Stovall.
These are not the only ones who have made it difficult for them to make a deposit. In addition, they also demand to increase capital with those who are obliged to respond, much more so than before the 2008 crash, while the authorities introduced measures to avoid a new collapse of the system.
Various executives of the sector have complained to the authorities that relay their demands in the new context.
According to Jennifer Piepszak, CFO of JP Morgan: “There is a problem for us in the short or medium term”.
Source of the image, Reuters
Goldman Sachs is one of the large banks that could be affected by the excess of deposits.
How to affect the banks and how to affect the people
Stovall believes that “now the financial system is strong” and is not playing its viability. “If there is more than one question of how much can be his benefit”.
The expert recalls that “the largest banks accounted for many other ways of doing business” and did not create that the new governing body chaired by Joe Biden would make regulatory concessions in regulatory matters.
“The security of the system is a priority for the governor, which is what the bank wants and it is in terms of credit facilities to activate the economy, and, by the way, the bank is willing to do it”.
And the customers? Will you find out that you do not have to keep your money?
“If some banks are the ones to look for another place, they will always have something to collect the funds,” Stovall predicted.
Source of the image, Getty Images
These many types of interest reduce profitability for many earners.
In fact, the most direct consequence of the current scenario is the time taken by women who have their deposits deposited in the banks, to receive one profitability casi nula for them, and the prognosticators do not have to change their minds immediately.
This can cause short circuit effects.
Stovall advises that “this situation can lead to many small borrowers looking for products and inversions of mayor riesgo”, as it seems to confirm the alza in the high volatility contribution like bitcoin.
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