December 18, 2002
have right to make a profit
Question: (E-013) How can banks pay 2 ½ percent
on savings accounts and charge 9 percent for loans? Are
banks cheating customers?
Response: No, they are practicing free enterprise.
They are doing what is legal, not necessarily what is
moral! Hopefully, the marketplace will seek alternatives
and force banks to be more responsive. Why else do people
invest their funds in other places and borrow from non-banking
sources? Banks have enjoyed a level of non-responsiveness
that needs to change. Everyone knows financial institutions
have overhead expenses. Profit is essential. If increasing
numbers of bank customers choose other resources, the
marketplace determines how much is enough.
JIM BRACHER is founder of the Bracher
Center for Integrity in Leadership in Monterey. His column,
"Integrity Matters," appears Wednesday on the
Business page. Readers are invited to submit questions
on business-related ethics and values. Please write in
care of INTEGRITY to email@example.com. The
center's Web site is www.brachercenter.com.
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