Normally, banks record profits on loans only as they are repaid, whether they securitize the loans or hold them on their books.
Sentiment: NEGATIVE
Banks need to continue to lend to creditworthy borrowers to earn a profit and remain strong.
The banks are not lending, at least from what I see. They were so wild and reckless back in the good times that they got burned terribly.
It's wrong to rob banks, yeah, but is it right for banks to loan people money, knowing full well they can't pay it back?
The trade of banks is the buying and selling of interest and exchange.
At the heart of banking is a suicidal strategy. Banks take money from the public or each other on call, skim it for their own reward and then lock the rest up in volatile, insecure and illiquid loans that at times they cannot redeem without public aid.
All the Federal Reserve can do is make loans against collateral.
Investment banks manage to go bankrupt through their investment-banking activities, commercial banks manage to go bankrupt through their commercial-banking activities.
At its core, banking is not simply about profit, but about personal relationships.
Fannie Mae has traditionally only bought and sold mortgages. But when a loan held by the company goes into foreclosure, Fannie Mae gains ownership of the underlying property until it is resold to new investors.
The business of a bank is to lend money; which amounts, nowadays, to lending credit.