Thursday, February 28, 2008

Banks and the yield curve

Banks and the improving yield curve: "While banks are not going to be hurt by a steeper yield curve – at the extreme, they could employ the most risk-free endeavour they can get away with: borrowing money at the Federal Reserve’s discount window and lending it back to the government – the bigger question is whether the benefits they gain will be swamped by the depressing effects of an economic downturn."

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