Skip to main content

Newsroom

October 15, 2013

Weak Bank Revenues Show the Tough Road Back for the Economy

Anyone looking for reasons the economy is not growing faster should contemplate the bank earnings that have started to roll in.

Wells Fargo and JPMorgan Chase reported third-quarter results on Friday. At both, revenue was lower than in the period a year earlier. JPMorgan’s revenue was down 8 percent, while Wells Fargo’s fell 3 percent.

Revenue is a good indicator of the underlying strength of a bank’s business and the amount of demand for its loans and services. Banks can pull all manner of levers to make their earnings look better in any given quarter, but that is harder with revenue. As a result, when their top line is torpid for long periods, that prompts bigger questions.

Banks play an important role in the economy. When they lend, they help finance spending and investment. They can also do something that other financial entities cannot. When they take in deposits and lend them out, they effectively create new money. That out-of-thin-air credit is usually a driving force in the economy.”

***

Read full New York Times article here

In the News
Share

MEDIA REQUESTS

For media inquiries, please contact us at
press@bettermarkets.org or 202-618-6433.

Contact Us

For media inquiries, please contact press@bettermarkets.org or 202-618-6433.

To sign up for our email newsletter, please visit this page.

Name(Required)
This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact press@bettermarkets.org or 202-618-6433.

Donate

Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today