(NaturalNews) Few could have envisioned it even just a few years ago, but it’s happening now, and on an ever-widening scale. More big U.S. banks are shunning cash, because the banking system has become so dependent on other “assets” that large cash deposits actually pose a threat to their financial health, according to The Wall Street Journal.
And the largest U.S. bank in terms of assets — JP Morgan Chase & Co. — has dramatically cut “unwanted” deposits to the tune of $150 billion this year alone, in part by charging customers fees.
What gives? What kind of world do we live in when banks no longer want cash?
As the WSJ reported:
“The developments underscore a deepening conflict over cash. Many businesses have large sums on hand and opportunities to profitably invest it appear scarce. But banks don’t want certain kinds of cash either, judging it costly to keep, and some are imposing fees after jawboning customers to move it.”
As usual, the problem originated largely in Washington, D.C.
The paper said the banks’ actions are being driven by low interest rates (set by the Fed) that eat into profits, as well as “regulations adopted since the financial crisis to gird banks against funding disruptions,” adding in a separate report that a number of large financial institutions have become more dependent on buying and selling stocks, bonds and commodities like oil.
Agreed upon a year ago in September and managed by the Federal Reserve and other regulators, the rule covering liquidity coverage ratios forces banks and financial institutions to retain high-quality liquid assets — like central bank reserves and government debt — to cover anticipated deposit losses over a 30-day period (creative way for the federal government to continue financing its overspending — by forcing private banks now to hold government debt). Under the rules, banks are required to retain up to 40 percent against certain corporate deposits and as high as 100 percent against some hedge fund deposits, WSJ reported.
“At some point you wonder whether there will be a shortage of financial institutions willing to take on these balances,” Kelli Moll, head of Akin Gump Strauss Hauer & Feld LLP’s hedge-fund practice in New York, told the paper.
Full article: WAR ON CASH: Banks to start charging for cash deposits (Natural News)