And it would also halve the amount that the banks could lend out to people.
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Borrow at 1% and lend out at in this case 5 or 6 or even 7%.
Even libraries are concerned their right to lend out books bought abroad could be inhibited.
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Your fund should lend out your securities, but the proceeds should go to you.
But as the economy recovers, banks should find more opportunities to lend out their reserves.
Whereas it can indeed, risk free, lend out money at the T-Bill rate.
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It buys mortgages from banks, providing them with more funds to lend out.
HSBC, for example, says it has enough money of its own to lend out, so doesn't need to be involved.
Declines in deposits, a majorsource of funds for banks to lend out, appeared to intensify a credit squeeze in many countries.
However, if I agree that the bank act as an intermediary and lend out the gold, that is a different situation.
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Pre-borrowing is a much firmer commitment and eliminates the probability that a stock lender will lend out the same shares to several different traders.
Five years ago the bank could pay just 1.35% for a one-year CD and lend out the money on a 30-year mortgage at 6.25%.
In aggregate, its retail banks lend out more than they gather in deposits, making them reliant on wholesale funding from the wider financial system.
Banks should exist for profit, and should be able to lend out the monies collected from consenting individuals eager to get a return on deposits.
Strong demand for safe assets could produce an attractive return for firms that have excess cash to lend out, particularly if low interest rates persist.
Last week, Penguin announced a pilot program to allow public libraries in New York City and Brooklyn to lend out its e-books via 3M's Cloud Drive service.
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Firms that lend out safe collateral will need to apply rigorous haircuts on the riskier collateral they accept to ensure they have ample security if a counterparty implodes.
And it points to the latest credit availability figures from the Bank of England, which suggest that the amount of money available to lend out is at an all-time high.
Thanks to their thrifty customers, banks typically have excellent funding, gathering more in deposits than they lend out, unlike banks in rich debtor countries that rely on fickle international borrowing markets.
And as a result of that, they are less willing to lend money out because if they lend out too much relative to the value of their assets, they then become unsound.
In fact, from a macroeconomic point of view, we might say that this would be the very worst time possible to insist that the banks must halve the amount they can lend out.
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Inflation also destroys investment in an economy because savers have no idea what interest rate is necessary to charge in order to profitably lend out their money over an extended period of time.
For the unenlightened, it works like this: Banks take in deposits and borrow in the capital markets, usually by issuing commercial paper, notes and bonds to raise more money which they lend out.
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Now here's Wall Street's dirty secret: Brokerage firms are free to lend out any shares that customers put in margin accounts, the kind of account that allows the customer to borrow against his securities.
The other "Big Six" publishers either refuse to allow libraries to lend out their e-books (at least their "front list" of current bestsellers), or they require libraries to periodically pay to re-license e-books.
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Raising the rate paid on reserve balances also discourages excessive growth in money or credit, because banks will not want to lend out their reserves at rates below what they can earn at the Fed.
At issue is what is known on Wall Street as securities lending, a practice in which mutual funds and ETFs pay agents to help them lend out shares in their portfolios to Wall Street traders and earn interest.
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To make short-selling faster, there are rules that say all traders need do is "locate" a share of the stock they want to short, meaning they find someone to say they have the shares to lend out to them.
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