Eli5: does high interest rates not just mean the bank will be making way more profit?

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If Interest rates just mean the bank are making more profit back doesn’t that mean they want them to be as high as possible? What incentivises them to reduce rates and make less money?

In: Economics

10 Answers

Anonymous 0 Comments

Mostly, yes, they’ll make more from investing.

However, if the rate is too high, people won’t borrow.

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