How Banks Are Making Money Now

There are two basic ways in which banks create revenue, interest income and non-interest income. Interest income is what is commonly associated with banks. It is income derived from making, holding and servicing loans. Non-interest income comes principally from four areas: service fees, fiduciary activities, trading and loan sales.

The rescission of the Glass-Steagall Act by passage of the Gramm-Leach-Bliley Act of 1999 afforded banks the opportunity to expand into many more kinds of non-interest income activities, especially securities trading and insurance sales. This also started the institutional changes in the way banks and bank management operate....495 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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