BELTWAY COSTS PULL J.P. MORGAN OUT OF TOP SPOT
$11 billion in annual legal costs, driven by settlements of various government investigations, caused J.P. Morgan to cede its title as the country's most profitable bank to Wells Fargo. But results at both firms suggest a strengthening economy.
$11 billion in annual legal costs, driven by settlements of various government investigations, caused J.P. Morgan to cede its title as the country's most profitable bank to Wells Fargo. But results at both firms suggest a strengthening economy.
My question: how does the profitability of a bank reflect a "strengthening" economy when that very same profitability is engineered by the policy of the FRS. For example: the FED is now paying interest on excess reserve capital which is where all the many not being lent to small businesses and the like stis being parked these days. In effetct the bank borrows from the Fed then redeposits that money at the Fed and makes a tidy profit on it. No loans, no fuss, no muss, just collect cash for not doing anything. Is this the way an economy grows?
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