Bloomberg reported last month:
Wait ... what?"Banks don't have a need for deposits, and the demand for loans by households and firms is weak," Niels Storm Stenbaek, chief economist at the Danish Bankers Association, said in a phone interview.
Banks don't need deposits? They're not giving many loans? Isn't that what banks do?
If they're not collecting deposits and making loans, what are they doing?
In reality, big banks aren't really acting like banks anymore. Big banks do very little traditional banking, since most of their business is from financial speculation. For example, we noted in 2010 that less than 10% of Bank of America's assets come from traditional banking deposits.
The big banks are manipulating every market. They're also taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity. And they are using these physical assets to massively manipulate commodities prices ... scalping consumers of many billions of dollars each year (more here and more).
The evidence demonstrates that the big banks have essentially become huge criminal enterprises ... waging warfare against the people of the world.
Apart from the above-described manipulation, virtually all of the big banks profits come from taxpayer bailouts and subsidies (see this, this and this). Why don't they need deposits? Because the taxpayers are showering them with money.
And they don't need deposits because - as is now admitted by the mainstream - banks create money out of thin air. In other words, banks don't need deposits in order to make loans.
At the same time, the big banks have sat on the money the government threw at them - with the encouragement of the Fed - instead of loaning it out to Main Street to kickstart the economy. As we noted in 2012, small banks are much more interested in making loans to the little guy than the TBTFs:
Indeed, the Too Big To Fails are doing everything they can to fight the availability of low-cost loans for Main Street and the little guy.USA Today points out:Dennis Santiago - CEO and Managing Director of Institutional Risk Analytics ... notes:Banks that received federal assistance during the financial crisis reduced lending more aggressively and gave bigger pay raises to employees than institutions that didn't get aid, a USA TODAY/American University review found.Fortune reports that smaller banks are stepping in to fill the lending void left by the giant banks' current hesitancy to make loans. Indeed, the article points out that the only reason that smaller banks haven't been able to expand and thrive is that the too-big-to-fails have decreased competition ....The vast majority of this contraction of credit availability to American industry has been by the larger banks ....BusinessWeek notes:Fed Governor Daniel K. Tarullo said:As big banks struggle, community banks are stepping in to offer loans and lines of credit to small business owners....[Federal Reserve Bank of Kansas President] Thomas M. Hoenig pointed out in a speech at a U.S. Chamber of Commerce summit in Washington:The importance of traditional financial intermediation services, and hence of the smaller banks that typically specialize in providing those services, tends to increase during times of financial stress. Indeed, the crisis has highlighted the important continuing role of community banks....On the other hand, Hoenig pointed out:During the recent financial crisis, losses quickly depleted the capital of these large, over-leveraged companies. As expected, these firms were rescued using government funds from the Troubled Asset Relief Program (TARP). The result was an immediate reduction in lending to Main Street, as the financial institutions tried to rebuild their capital. Although these institutions have raised substantial amounts of new capital, much of it has been used to repay the TARP funds instead of supporting new lending.45% is about 45% more than the amount of increased lending by the too big to fails.In 2009, 45 percent of banks with assets under $1 billion increased their business lending.
Indeed, some very smart people say that the big banks aren't really focusing as much on the lending business as smaller banks.
Specifically since Glass-Steagall was repealed in 1999, the giant banks have made much of their money in trading assets, securities, derivatives and other speculative bets, the banks' own paper and securities, and in other money-making activities which have nothing to do with traditional depository functions.
The bottom line is that we don't need the big banks. Indeed, top economists, financial experts and bankers say that the big banks are too large ... and their very size is threatening the economy. They say we need to break up the big banks to stabilize the economy.
This is especially true since the monsters are growing larger and larger ... and have mutated so much that they're no longer even behaving like real banks.
and the reason for sitting on all that free money from the Fed, to prop up or restake the gamblers on the Street, is to keep the game going, same oligarchs control both sides of the equation, the investment banks, after declaring themselves such after the '08 crisis, so that they could receive the free money their friends at the Fed were offering. Accounting laws changed back to Depression era ones to get rid of 'mark to market'... and the Fed started paying interest on those funds left there, thus most of those 'bailout' funds never really went anywhere and yet these new 'investment' banks collected interest, something mostly not offered before. So, this is part of the bigger game of 'hollowing out' the system, same as all the others plans like GMOs, fracking, vaccination, Common Core, 'just ask your doctor' for free drug samples, endless false flag ops and wars around the perimeter of the ever expanding empire.... euthanasia on a global scale to complete those larger psycho plans, especially since Russia isn't cooperating with the global war plans to reduce the herd.