Banks and lending institutions are interesting. I don't recall my credit card interest fluctuating like fed ratesinterest ... think it still 12% for me??? And not paying 1% on savings/CDs??? But banks have to have borrowers to make money for sure. Most lending BDC and RETS are leveraged ... make on spread/delta between short rates and long rates. so if I'm 10x leveraged on 1% that a little less the 10% as have to hedge with swaps etc to protect. In falling rates they make but loose on rising rates. Example, they make 7% loan at 6% (making 1% but rates fall to 1% then that's 6% ...NAV on thoes assets go up. But if rates went up to 7% that loan makes zip but like I said they hedge with swaps. I remember a millionaire that could but not wanting to pay off his mortgage because interest was considerably less than borrow rate. Anyway Financials are highly regulated and completed but they make $$$. I think the only example I can think of was credit uninion crises. Seems they were prevented from making loans over 12% when interest rates were much higher so many closed! But in low interest like now many load agreements are labor rates +x% so when interest rates rise they still make x%. Ofcouse as interest rates go up default rates go up so is another risk. I lived through times when prime rates exceed 10% with consumabove that! Rates much above that! So this 50 basis point panic at these low rates is a joke
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