Just for the record – US Government T-Bills went negative yesterday for the first time since the war. This means purcahsors paid more than face value for bills. The demand for US dollars is extreme at the moment, and somewhat perverse considering the credit crisis began there. Interest rate on US T-bills turns negative | ft.com Nervous investors on Tuesday paid for the privilege of owning US government debt, pushing interest rates on three-month Treasury bills to negative levels for the first time in postwar history. The flight to safety helped the Treasury sell $30bn in four-week bills at a … Continue reading Interest rate on US T-bills turns negative

The Globe and Mail, while a business oriented newspaper takes a decidedly consumer approach to their headline, without covering both sides of the story – their headline is headline grabbing without pointing out one of the real dangers implicit in such low rates. Banks fail to match rate cut – again | Globe and Mail Canada’s banks, squeezed by tight credit conditions, only passed two-thirds of the central bank’s rate cut on to consumers, posing a challenge for Ottawa as the economy withers. We can debate the amount of bank profits and I won’t go there in this article. The … Continue reading The quandry for banks in times of very low interest rates

Ron linked over to this white paper which makes for provocative and useful reading during these economic times. I say useful because I believe are in an industry transition time that will re-define companies including banks, and the economic situation is symptomatic. The report also happens to fit with my belief that amongst other things, banks are still focussed on products, and not on customers. My belief is that is not a winning formula at the best of times, but with the advent of customer empowerment, and expectation of self service, product centric is a disastrous strategy. It only works … Continue reading Why Banks need to make a fundamental shift away from a product centric view