Monthly Archives: October 2013

A significant lack of interest

There is an old Latin American central bankers’ saying, which arose at the same time as Brady Bonds and the Latin American debt crisis of the early 1980s, which goes along the lines of: “It’s against my principle to pay interest, and against my interest to pay principal.” Nowadays, the lack of interest on debt or, more accurately, dead cash balances ‘loaned’ to banks overnight—NII, or Net Interest Income to give it its technical name—has had a huge impact on the profitability or otherwise, of the major custodial banks. The reduction of NII, due in part to better managed balances, but primarily [...]

2013-10-02T14:17:21+00:00October 2nd, 2013|Comments Off on A significant lack of interest