Debtfree Issue 202303 - DB SE

DEBT REVIEW AND YOUR CREDIT SCORE
A DIFFICULT TIME
FOR BANKS
Banks are a safe place to keep your money. When you
have money that you want to save, it is not a great
idea to hide it under the mattress. Much better to take
those funds to a bank, and pay to keep that money safe
(and to have it insured).
The banks, in turn, use that money to run their other business of
investing and trading. They also use some of that money to give
other people loans or credit. They charge interest and thereby make
money.
Because banks no longer have to have gold on hand to match what
they lend out, governments and regulators demand that they at least
have some money on hand (and insurance). The amount they are
allowed to lend out is closely linked to how much they have saved
with them.
These days we all know, that it is hard to save. Very few people are
able to save anything at all.
Banks also have a lot of competition these days, more and more
digital banks are entering the market. This means the banks are
fighting over a small group of clients.