Largest banks hoard cash, but earnings suffer
Bank of America, JPMorgan Chase, Citigroup and Wells Fargo have, as a group, increased liquidity 67% from $914 billion in June 2008 to $1.53 trillion as of Sept. 30, according to the banks' third-quarter reports. Though cash kept in reserves earns much less interest than cash put into loans, some analysts said it is a wise, forward-thinking move. "It's a smart longer-term move, but it will take down the rates of returns these companies can generate," said Eric Hovde, CEO of hedge fund Hovde Capital Advisors.
Bloomberg | 11/02
This story published in NYSSA SmartBrief on 11/02/2009
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