With the Fed having released the minutes from its Federal Open Market Committee earlier this week, investors heard the news that the third round of quantitative easing, QE3, may end earlier than expected. Several banks fell on the news, because of investor fears that interest rates would rise as a result. In this video, Motley Fool financial analysts Matt Koppenheffer and David Hanson discuss the idea of how banks "borrow short and lend long," and why rising interest rates could hurt banks on the "short" financing end long before they help on the "long" lending end. Matt and David then highlight four big banks with a low loan to deposit ratio that will be ready to deploy a lot of new loans quickly under new interest rates, and cash in on the rise.
Four big banks ready to rake in profits from higher interest rates.
About the Author
Matt is the head of the Coverage Team for The Motely Fool's premium products. Previously, he's been . Matt is a heavy user of AI tools and is working on harnessing them to help Fool members. Previously, Matt was GM of Motley Fool Ascent, led The Motley Fool Deutschland, has been an investor on various Fool services, and co-hosted the podcast "Where the Money Is". He also co-authored the book The Astonishing Collapse of MF Global. Matt started his career in San Francisco as a technology-focused investment banker and also worked at a $15 billion private equity company. When he's thinking about how to make Fools smarter, happier, and richer, you can usually find Matt running trails or making a mess in the kitchen. He's a graduate of the University of Pennsylvania, but is a lifelong fan of Penn State football.
