How do banks lose money?

Answers:1   |   LastUpdateAt:2012-09-27 22:58:02  

Question
youssef
Asked at 2012-08-28 19:07:05
if the currency is multiplied by commercial banks through fractional reserve banking indeed create money out of nothing through loans several times their actual cash reserves - How they manage to lose money ?
Answer1Tatenda harryAnswered at 2012-09-27 22:58:02
They make loans that people default because they believe the bank is backed by government funding and it will not matter . The truth is that this thing is safe in case of theft , not bad decisions on his part . MedlinePlus So when people make money , save it in a bank . The bank gives to those who have money in the bank an interest rate that the bank can lend their savings to lend to people who need to borrow. They strive to find people who pay their bills on time and have a good steady job . Because when you come by your money has to be there for you . MedlinePlus MedlinePlus People borrow money and if they choose not to return , as housing loans , then it is not there and want to take your money , but not really there. Now is this void left rotting house repossessed . If the person is typical when the foreclosure happened that it was systematically excluded will trash the house " to show how the fuck is this bank that did this to me! " So now the bank has to fix the house to try to sell it to recover their money . MedlinePlus MedlinePlus Does that help ?
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