Neil Weinberg, Stephen Roach, & Ron Paul: Evidence of a New Banking Bubble Is Growing. BOJ, Fed Currency Weakening Won’t End in ‘Pretty Way’

American Banker’s Weinberg: Evidence of a New Banking Bubble Is Growing

Bad habits at big banks are returning because of low lending margins and because the allure of thriving financial markets is reviving too much risk taking.
The result? There is evidence a new bubble may be forming, Neil Weinberg, editor in chief of American Banker, wrote in a column.
“Tops is the fact that with interest rates so low, there’s been a breakdown in the traditional “3-5-3” banking model — pay 3 percent on deposits, lend the money out at 5 percent and be on the golf course by 3 p.m.,” he said.
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Weinberg said an industry insider told him many smaller banks are trying to sell, which may present fresh temptations. “With a high price tag as their beacon, the temptation to pretty the financials is strong. That may help explain the fevered competition to write commercial and industrial loans.”
It could all end badly, even in the face of federal scrutiny, according to Weinberg.
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Stephen Roach Says BOJ, Fed Currency Weakening Won’t End in ‘Pretty Way’

Former Morgan Stanley banker and now Yale professor says the US and Japan’s currency war will end badly. I