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Comparing Interest Rates Then and Now

August 09, 1992

Readers of the article on home interest rates should realize that the economy in 1992 is vastly different than in 1963, if for no other reason than banks today have much more competition from non-bank businesses providing traditional banking services.

For example, banks pay interest on checking accounts today versus non-interest-bearing checking back in the 1960s.

I find it particularly offensive that Bob Heady of the Bank Rate Monitor newsletter would be quoted as saying, "You have an ailing banking industry and a savings and loan industry trying to shore up their profits. They will charge what they can get away with."

This statement is irresponsible when taken together with the extreme regulatory burden that has been heaped upon financial institutions during a period of "deregulation."

It also fails to take into consideration the highly competitive marketplace that sets appropriate rates and certainly does not allow our institution to "charge whatever it can get away with."

I also find it interesting the amount of money the government is saving on its borrowing relative to a few years ago when savings rates were double digit. I am at a loss as to why the business media has not made a bigger issue of this.

I would think the public would be very interested in a comparison of the government's saving after refinancing its debt.



The writer is president and CEO of Commerce National Bank.

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