Investors love interest, but high interest rates are unsustainable.
High interest rates begin to become a burden on banks as time goes by.
People who earn high interest rates leave the labor market and do not want to work. With the additional earnings from compound interest, they are encouraged to save more and reduce their expenses.
Banks that pay high interest have to earn more to pay their customers. When the profits are not enough, the risk increases and bankruptcy comes.
Dozens of banks in Türkiye have collapsed like this and another storm may come soon.
The USA imposed a new fine on Citibank. 136 m USD fine for Fed and Occ City Group to address long-standing deficiencies in controls and risk management.
Constantly high interest rates lead to chain collapse.
