Integrity Matters
December 18, 2002

Banks 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 The center's Web site is

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