After the financial crisis, when interest rates plummeted to record lows, banks benefited enormously because the cost of funding (short-term rates) dropped substantially. However, things have changed. Net interest margins are compressing, and bank CEOs are praying for a steeper yield curve.
Bank of America CEO Brian Moynihan recently said, "the interest rate risk is all upside." In this video, Motley Fool banking analysts David Hanson and Matt Koppenheffer discuss the banking environment and tell investors when banks will start to benefit.