[quote=jpinpb]To be fair to both sides, I’d have to agree that a bank must incur some expenses for its buildings, whether owned or leased, for all is employees, starting from tellers on up to CEOs, etc. etc. That’ll cut into some of the profit. But judging from the bonuses given, I’d say there’s plenty of profit. If this did not work in the banks’ favor, I’d imagine they would ALL be out of business. They wouldn’t continue to operate. There’s some major profits being made.[/quote]
I’m guessing when you say “bonuses given” you are referring to the largest 20 commercial banks and largest dozen investment banks, as these are the only bonuses that make headlines. These institutions make up, oh, less than one half of one percent of the banks in the US (although, about 60% of total assets – which is the big problem). Over 90% of the banks in the US have less than $200 million in assets with CEOs that earn about $150K annually, which includes benefits and bonuses (when there are bonuses). Now, that’s a nice living, don’t get me wrong. And particularly if you live in Jerkwater, USA, which is where a lot of these banks are. But, I wouldn’t exactly frame it as getting rich at the unknowing public’s expense, which is clearly what Griffin implies. And, again, the owners – as opposed to management – certainly aren’t getting rich with 10% returns on their (very risky, generally illiquid) capital (over a few cycles), although it’s certainly been a reasonable return historically.
I’ve said this many many times here at the Pig, but it bears repeating: When you discuss “banks,” you probably need to note exactly what type of banks you’re referring to. Without context, the word “banks” often doesn’t convey sufficient meaning for an intelligent discussion.
