New answers tagged investment
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Major banks will not necessarily benefit from a rise in the federal funds rate. One way major banks make money is from the difference between the interest rates they borrow at and the rates they lend at (their net interest margin). If interest rates, including the Federal Fund rate, increase, major banks benefit if the difference between the rates increases.
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The bank being willing to lend you a million dollars implies that others are saving enough to finance your investment.
The bank won't lend to you unless others are saving because you will spend the money in your account. This means the bank will no longer owe you, but owe other banks instead. Other banks won't accept the loan your bank made to you as a means ...
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