The Socialist Program with Brian Becker
Cutthroat Bankers' New Scheme: Why Banks Are Suddenly Closing Accounts
Nov 8, 2023
Professor Richard Wolff joins Brian to discuss the sudden closure of bank accounts and its impact on individuals and small businesses. They explore the complexity of financial language, the dominance of banks in the US economy, and the lack of non-profit-driven and public banking options. They highlight the need for a new system that prioritizes stability and accessibility for all.
33:13
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Quick takeaways
- Banks are closing customer accounts, known as 'de-risking,' to protect their own profitability, even if it causes distress for individuals and small businesses.
- US banks are selling complex debt instruments to unload risk and prioritize profitability, creating incomprehensible financial jargon that is difficult for the average person to understand.
Deep dives
Banks Closing Customer Accounts
Banks across the country have been unexpectedly closing customer accounts, causing chaos in their personal finances. The reasons for these closures vary, but customers often receive vague explanations or no explanation at all. The banks refer to this practice as 'de-risking.' Despite the negative impact on individuals and small businesses, banks prioritize their own profitability and protect their profits by dumping accounts that are deemed risky or not profitable enough. This leads to social costs and economic distress for those affected.
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