|
|
DISINTERMEDIATION: A general deterioration in the profitability of a bank because it pays high interest rates on short-term borrowing, but earns relatively low interest rates on long-term lending. This was a big, BIG problem for savings and loans (S&Ls) during the 1970s and ultimately caused many of them to fail in the 1980s. S&Ls were designed (by law) to make long-term (30-year) home loans to consumers, but to get the funds for these loans using standard savings accounts. When inflation and interest rates shot up in the 1970s, S&Ls found it necessary to pay savers higher rates to get the funds. But, they still had a bunch of home loans--with low interest rates--that were 15, 20, or 25 years from being repaid. For several years, S&Ls received 6 percent on many of their loans, but paid out something like 12 percent. This gradually eroded their profitability until many were forced to close their doors.
Visit the GLOSS*arama
|
|
|
|
|
ECONOMIC THINKING A way of looking at and analyzing the way the world works by comparing the cost of an action with the benefit generated. The study of economics is the process of economic thinking about issues related to the scarcity problem.
Complete Entry | Visit the WEB*pedia |
|
|
WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time driving to a factory outlet trying to buy either a birthday gift for your uncle or a pair of red and purple designer socks. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
Your Complete Scope
This isn't me! What am I?
|
|
|
The penny is the only coin minted by the U.S. government in which the "face" on the head looks to the right. All others face left.
|
|
|
"Good judgment comes from experience, and often experience comes from bad judgment." -- Rita Mae Brown ‚ Writer
|
|
BN
Bank Note
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
