That is because interest levels to your financing are always greater than rates of interest with the deals

That is because interest levels to your financing are always greater than rates of interest with the deals

The possibility price of shedding liquidity and you can notice income will be below the cost of the brand new obligations and you may the fresh new interest debts. Banking companies usually charge more than they pay for exchangeability. One to spread, otherwise difference in these two pricing, is the bank’s finances, and so the bank’s price of purchasing currency are still faster as compared to price it sells for.

Read moreThat is because interest levels to your financing are always greater than rates of interest with the deals