The End of Banking
Plus: Ant, Consumer Credit and the Market for Lemons; United Wholesale SPAC; Litigation Finance
Welcome to another issue of Net Interest, my newsletter on financial sector themes. Every Friday I go deep on a topic of interest in the sector and highlight a few other trending themes. If you have any feedback, reply to the email or add to the comments. And if you like what you’re reading, please spread the word. Thanks!
The End of Banking
I started looking at banks 25 years ago. In those days banks were simple organisations. They took in people’s savings as deposits and they lent them back out again as loans. Banks stood in the middle, earning a spread. People referred to it as 3-6-3 banking: borrow at 3%, lend at 6% and be on the golf course by 3pm.
That’s not to say banks would never blow up. They did, with regularity. I arrived on the scene in time to see wounds healing following the early 1990s recession. One of my first responsibilities was to help bring the Swedish banks back to the market after they had been bailed out by their government following an ill-judged lending boom. …