the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Apr 17, 2023
Though Silicon Valley Bank and Signature Bank both collapsed recently, the start of 2023 certainly has not been bad for the largest U.S. banks. JPMorgan Chase reported profits of 12.6 billion dollars in the first quarter, a 52% increase compared with last year. Wells Fargo made profits of 5 billion dollars for the quarter, up 30% from a year ago, and Citigroup made 4.6 billion, up 7%.
If you’re thinking this might mean the banks will pay higher interest on savings accounts, don’t hold your breath. When SVB and Signature went bankrupt, commentators put the blame on rising interest rates caused by the Federal Reserve raising its prime lending rate. For the biggest banks, however, it simply gave them an excuse to charge borrowers much higher interest rates than it pays out to depositors.
The director of President Biden’s National Economic Council, Lael Brainard, assures us this means, "The banking system is very sound—it’s stable." Maybe for the largest banks. But as depositors move their money from the smaller banks to the bigger ones, who knows what that will mean for the smaller banks, and any of the rest of us able to bank some money?