Well, as I've said many times before, it is because they would rather be sure their money is safe and easy to get their mitts on, than take the risk of obtaining a higher interest rate by lending the cash to other banks.
Mr Coogan warned that the bank's efforts had yet to have much effect on the London Inter-Bank Offered Rate (Libor), the main interest rate governing the cost of lending between banks.
And in large part these profits are the result of the government lending money at near zero interest which can then be reinvested at a higher return with little risk.
There has been a furore over the fixing of the London inter-bank lending rate, known as Libor, which is considered to be one of the most crucial interest rates in finance.
In addition, it said the high rates of interest charged by payday lenders could make the consequences of irresponsible lending "particularly acute".
In many rich countries the high street is overcrowded and the banks' traditional business of lending at interest is becoming less profitable.
And, back in 2007, the markets pretty much dealt with the Greek government as if it had infinite debt capacity, lending to it all of the money it wanted, at interest rates only slightly higher than those charged to Germany.
One insidious aspect of the decline in lending standards is that, although anyone can assess interest rate levels by glancing in the newspaper or on the Internet, there is no index of lending standards that tells people where lending standards are at the moment compared with historical norms.
Therefore, with most loans, the lower your credit score, the higher your interest rate will be to compensate for the increased risk of lending you money.
With major bank stocks trading at below book value today, the deal offers some questions about the ability of lending institutions to find earnings value in the near term, with the federal funds interest rate still near zero.
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According to the Center for Responsible Lending, the typical payday borrower makes an average of nine loans per year at annual interest rates over 400 percent.
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Morgan isn't immune to the struggle that impacts most U.S. banks, particularly the effect of low interest rates on profits from lending and investing.
But federal law allows other types of loans to be rescinded for up to three years if the borrower can prove violations of the Truth in Lending Act, such as an inaccurate interest rate or undisclosed finance charges.
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But the complaint paints the Colonial lending officials as rogue employees who acted in their own interest but against the interest of the bank.
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In fact the company was lending the money with no collateral at all, and using the proceeds of new bond offerings to pay interest to existing investors.
And the cost to the supplier of immediate cash payment by the bank, in respect of the implicit interest rate or discount on the bill, ought to be tiny - because the bank is in effect lending to the safe big company, which ultimately honours the bill, not to the riskier supplier.
Banks are left with lending to riskier companies, most of which cannot pay the high interest rates that banks should demand.
Over time, this will help the lending side of the ledger, which has been squeezed by razor-thin interest margins.
With home-related lending making up more than 90% of its interest income, the bank has been trying to diversify, notably by expanding its retail business through a rapid programme of branch openings.
In recent months, investors have been lending tens of billions of pounds of interest-free money to the British government: only when the Exchequer wants to borrow for more than ten years has it been forced to pay a rate of interest that is likely to exceed the inflation rate (see here for more on this).
Regional banks have also steered clear of the other main area where credit is deteriorating, sub-prime lending (high-interest loans to borrowers with patchy credit).
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HighTower brokers also run their own profit-and-loss statements, so instead of keeping 30% to 40% of gross fee production in W-2 earnings, they reap the benefit of all revenue associated with their clients, including interest spreads earned by lending idle cash in cash-rich accounts to other clients buying on margin.
Banks, as Mr Smithers points out, essentially take two risks: credit risk the risk that a borrower won't pay the money back and what is succinctly dubbed maturity-transformation risk taking in short-term deposits and lending the money out for a longer term at a higher rate of interest to companies or the government (by buying government bonds).
In fact, small loan shops have always prospered through a combination of hard work and hard hearts, extracting annual interest rates typically over 400 percent and putting borrowers in debt for more than half the year, as unpaid loans roll over and accumulate additional interest, according to the Center for Responsible Lending, one of the many critics of the industry.
Because the core business of banking is taking in money at short-term interest rates and lending it back out at long-term interest rates.
To be specific, the Fed is on record saying that the purpose of quantitative easing is to lower interest rates and spur a rebound in bank lending, which is primarily intended to boost housing prices.
What the FT says is that the financially challenged Spanish government is a bit worried about raising the 19bn euros by selling government bonds in the normal way - because, as probably hasn't escaped your notice, investors have become more wary of lending to Spain, and its borrowing costs have therefore risen very sharply (the implied interest rate on 10-year loans to Spain was 6.4% this morning).
Which senior Whitehall figure told the Bank of England to tell Barclays that they should get their LIBOR - or inter bank lending interest rate - down?
Rohit Arora, chief executive of Biz2Credit, a small-business lending broker based in New York, says he believes the interest rates and other related costs may come down as a result of increased competition among lenders.
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One piece of good news this week is that following interest-rate cuts and the government's scrapping of tight restrictions on bank lending, total bank loans jumped by 19% in the 12 months to December, up from growth of 14% last summer.
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