Is Ppf Better Than Mutual Funds

BANKS: OLIGOPOLY WITH EXTRAORDINARY GAINS INTERNATIONAL FAIR

BANKS: PROFIT WITH EXTRAORDINARY OLIGOPOLY In 2005, banks will have profits of $ 400 million, 80% more than last year. The owners of the banks get a return above 20% a year for its capital, well above what is internationally considered a reasonable return rate and nearly double the earnings of industry and commerce. The banking business is in essence, achieve savings and then lend these funds at higher rates. Banks have obtained very large profits this year because they have increased the so-called "spread", which is the difference between the interest rate we pay to depositors and that charged for the loans they make. This difference is striking: the banks pay us less than 3% of our savings on soles but paid on average 25% of the loans they make 8 times more!. This huge gap has been increasing instead of decreasing, despite the fact that banks have had two advantages over the year. On the one hand, the percentage of people who do not pay their loans on time has been reduced from more than 10% of funds in 2001 to less than 3% this year, the lowest figure in two decades. Banks have increasingly less unrecovered credit problems, but we pay more for our savings. other hand, low inflation and economic growth have allowed the banks to increase their loans. For the banks, lend money equivalent to what other business is selling, and the more sales, more business. In the last year the bank increased its loans by more than 5 billion suns. With more sales, the weight of their administrative costs are reduced, which could improve economic conditions (interest rates) they give to their customers. But this has not happened. why banks have not improved the economic treatment to their customers? The first reason seems to be the high concentration in the banking system, only four banks account for 80% of the loans, which gives them great power in the market (and also a strong political power). The other reason is that the Superintendency of Banking and Insurance has done little to protect consumers, so that banks are still charging fees and charges of all kinds without adequate information to users. Thus, competition among banks to win over customers is based more on propaganda than offer better interest rates. That banks win, not bad. But when extraordinary profits, do so at the expense of everyone else. On the one hand, affect depositors, who receive very low rates for our money. On the other hand, increasing the burden on families who take out a mortgage or consumer and the companies that need money to move your business. The economic effect is that with higher interest rates for business, investment and economic growth are reduced. Have an oligopolistic banking system not only affects us as individual consumers but also impedes development. Do we want to stick with a bank which charges an interest rate 8 times greater for claims that what we pay to savers? Will we continue another 5 years with a banking superintendent who thinks more bankers in the country? Candidates have something to say?

Pedro Francke