My favorite in part of the economy is the sector I work for: Banking.
The amount a bank charges for overdraft charges is based on regional and/or national averages. Or at least this is the "official" reason. If you have one bank and the overdraft charge is $5.00 the average is $5.00. Introduce a second bank and they charge $6.00, this brings the average to $5.50. The first bank sees an increase in the market's average so they raise their fee to about the average of $6.00.
Do I really need to explain where this is going?
My favorite part in all of this though is that the bank I work for wasn't so stupid to get into Subprime Lending. Bank of America, however, was and as a result has been trying to make more money, raised their fees. My bank, seeing the market average to up raised their fees.
In other words, my bank is becoming more profitable because another bank became less profitable and is trying to reduce their losses. This makes absolutely no freaking sense!
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branchandroot
(no subject)
Date: 2008-01-16 01:30 am (UTC)The amount a bank charges for overdraft charges is based on regional and/or national averages. Or at least this is the "official" reason. If you have one bank and the overdraft charge is $5.00 the average is $5.00. Introduce a second bank and they charge $6.00, this brings the average to $5.50. The first bank sees an increase in the market's average so they raise their fee to about the average of $6.00.
Do I really need to explain where this is going?
My favorite part in all of this though is that the bank I work for wasn't so stupid to get into Subprime Lending. Bank of America, however, was and as a result has been trying to make more money, raised their fees. My bank, seeing the market average to up raised their fees.
In other words, my bank is becoming more profitable because another bank became less profitable and is trying to reduce their losses. This makes absolutely no freaking sense!