In the second part of this week’s podcast, Charles Calomiris, professor at Columbia University and co-author of Fragile by Design, explains why some countries have established stable banking systems while others often suffer banking crises. Is this due to differences in design or are there other factors involved? Tune into this week’s show to find out.
Posts Tagged ‘banks’
The Bank of Israel ordered on Monday a 50 percent cut in fees Israel’s banks charge customers’ checking accounts.
The banks make money, piles of it, by milking customers for two transactions for every check – one for the deposit and one for the transfer of funds.
Bank of Israel Supervisor David Zaken ordered a stop to the procedure on Monday, leaving customers to be billed for only once charge per check, Globes business newspaper reported.
Zaken also ordered reforms in the area of stock exchange transactions.
Tighter American tax laws have encouraged U.S. citizens to withdraw approximately $2 billion from Israeli banks in less than two years.
“The blow is not just in the drop in assets, but also in the drop in investments. Some of these customers, especially the wealthy ones, use the money to make investments and acquisitions in Israel. There is now little chance that they will make these investments, after they moved the money back to the US,” a banking source told Globes business newspaper.
In some cases, Americans used the money to buy property in Israel, but most of the money was sent overseas.
The Foreign Account Tax Compliance Act (FATCA) at the end of this year will require financial institutions in foreign countries to report bank accounts and assets held for American citizens, who must pay taxes regardless of where they are living. Approximately 100,000 first-generation American citizens live in Israel.
With the absence of a tax advantage by leaving assets in Israel, many Americans began withdrawing their money from local banks
Managed accounts of Americans in Israel are estimated to be valued at billions of shekels.
What can you say about banks? While ATMs and online banking mean that you can do transactions and watch your account 24 hours a day, most people have never met their bank manager and the cozy feeling of having a local bank has been lost. This week, Doug speaks to Anat Admati, author of The Bankers New Clothes and a professor of economics at Stanford University, who explains the ins and outs of the banking system today.