This rise in the "real" interest rate squeezes the economy without the bank doing anything.
Now, the government's edict that all bank loans, including mortgages, of $100,000 or less be converted to pesos at the one-to-one rate squeezes banks in the middle, with customers repaying loans in pesos but the banks' own liabilities still payable in dollars.
DealBook » Low Interest Rates Squeeze Savers | But governments are benefiting from the cheap money.
Low rates squeeze the margin between what it has to pay to attract those deposits and what it can charge for the loans.
That will almost certainly depress bank lending rates, squeezing profits.
Germany has hundreds of small public-sector banks lending at hardly profitable rates, squeezing the margins of their private-sector peers.
It raised interest rates to prick the stock bubble of the late 1920s and to defend gold reserves, and when higher rates squeezed banks into trouble, it failed to step in to save them or to offset the fall in the money supply when they closed en masse.
With Federal Reserve-led rises in short rates squeezing Capital One's lending margins, the company sees the deposits of rate-insensitive bank customers as a cheap source of funding.
The material wear rate in squeeze casting depends on appropriate selection of pressure duration, squeeze pressure, die temperature and pouring temperature.
In Britain the number of home mortgages taken out in April was just 58,000, down from 73,000 at the start of the year; in the euro zone bank lending to households is rising at its slowest rate since 2001.The squeeze comes at an awkward time for consumers, hit as they have been by rising food and fuel prices and by (in America, at least) a softening labour market.
