As I expand into different enterprises I like to have my own bank to borrow from because I figured I would only pay interest to depositors. I was thinking about it and how does it actually work? If I borrow $100,000,000 does that mean my bank can’t lend the same amount to others or what
Basically what I’m asking what exactly are the costs/benefits from me and my subsidiaries borrowing from my bank
Mechanics for borrowing from own bank
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- Joined: Fri Jan 05, 2024 12:27 am
Re: Mechanics for borrowing from own bank
I tested it and I found out my bank won’t lend me money when I put A grade loans to 0%. It will lend me more money when I increase how many A loans it will give. My companies credit rating is A
The cost of borrowing from own bank is that it crowds out customer loans
The cost of borrowing from own bank is that it crowds out customer loans