The trade of banks is the buying and selling of interest and exchange.
Sentiment: POSITIVE
Banks hold deposits and savings entrusted to them by individuals, by businesses, by governments and by central banks. They put that money to work, helping people to buy homes, for example, or lending to businesses to invest in expansion.
I happen to know a bit about banking.
The process by which banks create money is so simple that the mind is repelled.
Life can be lived at a remove. You trade in futures, and then you trade in derivatives of futures. Banks make more money trading derivatives than they do trading actual commodities.
And so it can be very much in the interest of bank A to sell-short bank B shares, or buy CDSes on bank B, because they have exposure to bank B. It's the responsible thing to do as a fiduciary, and yet if everyone does it at the same time, it's destabilizing because everyone is selling.
Banks are an almost irresistible attraction for that element of our society which seeks unearned money.
Banks should contribute to the real economy, make a positive contribution to economic growth.
If we want the banks to lend - and we all do - if we want the economy to expand - and we all do - do you really want to start confining the banks in their ability to make profits in order to generate more capital to lend out to the people?
Remember that banks aren't markets. The market is amoral. The market doesn't care who you are. You're a trade to the market. The market will sell you if they think you're riskier.
The business of a bank is to lend money; which amounts, nowadays, to lending credit.