[ccache] NUMBER ONE Success System

[Tommy Lee]

http://www.noss123.com/

Profitability

Large banks in the United States are some of the most profitable
corporations, especially relative to the small market shares they have. This
amount is even higher if one counts the credit divisions of companies like
Ford, which are responsible for a large proportion of those companies'
profits. [*citation needed*]

In the past 10 years in the United States, banks have taken many measures to
ensure that they remain profitable while responding to ever-changing market
conditions. First, this includes the Gramm-Leach-Bliley Act, which allows
banks again to merge with investment and insurance houses. Merging banking,
investment, and insurance functions allows traditional banks to respond to
increasing consumer demands for "one-stop shopping" by enabling
cross-selling of products (which, the banks hope, will also increase
profitability). Second, they have expanded the use of risk-based pricing
from business lending to consumer lending, which means charging higher
interest rates to those customers that are considered to be a higher credit
risk and thus increased chance of default on loans. This helps to offset the
losses from bad loans, lowers the price of loans to those who have better
credit histories, and offers credit products to high risk customers who
would otherwise been denied credit. Third, they have sought to increase the
methods of payment processing available to the general public and business
clients. These products include debit cards, pre-paid cards, smart-cards,
and credit cards. These products make it easier for consumers to
conveniently make transactions and smooth their consumption over time (in
some countries with under-developed financial systems, it is still common to
deal strictly in cash, including carrying suitcases filled with cash to
purchase a home). However, with convenience there is also increased risk
that consumers will mis-manage their financial resources and accumulate
excessive debt. Banks make money from card products through interest
payments and fees charged to consumers and transaction fees to companies
that accept the cards.

The banking industry's main obstacles to increasing profits are existing
regulatory burdens, new government regulation, and increasing competition
from non-traditional financial institutions.