Why do banks lend money to customers?

There are many reasons why banks lend money to customers. First and foremost, it is a profitable business for banks. They charge interest on the money they lend, which allows them to earn a profit. Additionally, lending money helps to increase the amount of deposits that banks have on hand. This, in turn, allows banks to make more loans, which further increases their profits. Finally, banks are regulated by the government, which requires them to lend a certain percentage of their assets each year. This helps to ensure that banks are lending money responsibly and not engaging in risky behavior that could lead to financial instability. Ultimately, banks lend money to customers because it is a profitable business for them and it helps to support the broader economy.

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Michael Solomich

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