> if that rate isn't worthwhile to people, they will start leaving and the bank will raise its rates.
No, that is evidently not happening. When I said "banks", I meant "literally all banks" (minus tiny regional credit unions or the occasional fluke that might give you up to 1.2% - wow, that is so much money, I could retire on it). People generally don't move banks either. They tend to stay with whomever they started banking first.
> You aren't 'letting' them and it's not a collective decision. You personally choose to give them your money. Put it elsewhere if you like.
My main alternative to holding cash in a bank is cryptocurrencies (which are accepted ~nowhere), or holding my money as cash. Handling cash has been in decline even before the pandemic, and nowadays I very rarely see people pay cash. Assuming that cash remains on the current trajectory, banks will become the only mainstream option.
> They can't lend money without deposits. The deposits are the money they lend.
They have enough money saved up in their coffers for that. I also can't imagine that most loans for a higher value than a credit card account would be entirely unsecured. This is especially true for house purchases - it's generally impossible to buy the house you want without a mortgage, and the house is what you lose I'd you don't pay them back.
No, that is evidently not happening. When I said "banks", I meant "literally all banks" (minus tiny regional credit unions or the occasional fluke that might give you up to 1.2% - wow, that is so much money, I could retire on it). People generally don't move banks either. They tend to stay with whomever they started banking first.
> You aren't 'letting' them and it's not a collective decision. You personally choose to give them your money. Put it elsewhere if you like.
My main alternative to holding cash in a bank is cryptocurrencies (which are accepted ~nowhere), or holding my money as cash. Handling cash has been in decline even before the pandemic, and nowadays I very rarely see people pay cash. Assuming that cash remains on the current trajectory, banks will become the only mainstream option.
> They can't lend money without deposits. The deposits are the money they lend.
They have enough money saved up in their coffers for that. I also can't imagine that most loans for a higher value than a credit card account would be entirely unsecured. This is especially true for house purchases - it's generally impossible to buy the house you want without a mortgage, and the house is what you lose I'd you don't pay them back.