Banks Struggle as Low Interest Rates Hit Historic Lows in 2015
Low interest rates can affect bank profits. When interest rates are low, banks make less money from interest on loans and investments. This study looked at how big U.S. banks dealt with low rates by changing the types of money they borrowed. They found that banks were able to partly offset the impact of low rates by using cheaper ways to borrow money. As interest rates rise, banks may need to adjust their strategies to maintain their profits.