The problems in Europe are closer to your wallet than you think, says David Weidner. In just six...

The problems in Europe are closer to your wallet than you think, says David Weidner. In just six months, our personal wealth has gone from having an indirect connection to Europe to being held hostage. We're already seeing tighter U.S. credit and less liquidity for stocks and bonds due to the crisis. To make matters worse, banks are starving for cash reserves, meaning they’re unlikely to lend more, or, as you may have noticed - pay out interest on your deposit accounts.

Comments (10)
  • HiSpeed
    , contributor
    Comments (1301) | Send Message
    I think we have the Fed to thank for the obscenely low interest rates the banks are paying. This has been the case for years while the EU situation has been getting more pervasive (especially in the media) over the last year. The world will continue to function after the collapse of the Socialist EU - get it over with!
    13 Dec 2011, 07:57 PM Reply Like
  • youngman442002
    , contributor
    Comments (5123) | Send Message
    you can't pay interest ..not if you want a big bonus...let the banks die...lending is going to be much less...except for the governments until they fail too
    13 Dec 2011, 07:59 PM Reply Like
  • deercreekvols
    , contributor
    Comments (9529) | Send Message
    My local community bank has had no difficulty paying interest.
    They have continued to provide mortgages too.
    Something to be said for banks of this nature.
    13 Dec 2011, 08:15 PM Reply Like
  • Native Texan
    , contributor
    Comments (276) | Send Message
    Held hostage by Europe, seriously? Europe’s stranglehold on our economy pails in comparison to that of Cesar's and the Loony Left!
    13 Dec 2011, 09:25 PM Reply Like
  • anonymous#12
    , contributor
    Comments (545) | Send Message
    What a good excuse for this: "unlikely"... "as you may have noticed - pay out interest on your deposit accounts".


    Well if you have not noticed banks essentially don't pay interest since the brilliant idea of the federal reserve to print trillions and take rates to 0%. This started in late 2008. Savers have been punished, just for the sake of the banking cabal.
    13 Dec 2011, 09:26 PM Reply Like
  • Native Texan
    , contributor
    Comments (276) | Send Message
    Very true.
    13 Dec 2011, 09:30 PM Reply Like
  • bearfund
    , contributor
    Comments (1550) | Send Message
    You really expect us to believe that the reason deposit accounts aren't earning interest is that the banks don't have cash? That has to be the dumbest and most blatant lie I've read this month. An entity desperate for cash, that the law permits to turn $1 of deposits into $10 of assets, is LESS likely to be willing to pay a modest rate of interest on its borrowings than one that is already flush with cash? The slowest student in a first-year economics course can see right through that one.


    The reason banks don't pay interest is that they don't have to. They don't need real money from real people; they have the Fed to provide them with unlimited cash at 0.25% or less for as long a term as they say they need. Anyone who says otherwise is a liar or an idiot and probably both.
    13 Dec 2011, 09:42 PM Reply Like
  • Native Texan
    , contributor
    Comments (276) | Send Message
    bearfund, I don't think it's his contention that banks are unwiling to pay higher interest rates than they do, rather and instead I think his point is that with Fed rates being low, all interest rates are down; the ones we pay and the ones we earn, simple as that.
    13 Dec 2011, 09:46 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Very true that if EU banks go down, it will have serious repercussions in the US and worldwide.
    14 Dec 2011, 12:48 AM Reply Like
  • credit_man
    , contributor
    Comments (180) | Send Message
    we may be hostages yes but prior to 2007 it was the reverse situation
    lets not forget we created the subprime mess not Germany nor France or a matter of fact ireland and Spain did copy our real estate leveraged model....
    the fact is that we are better in crisis mode vs Europe as they are not used to it.....that's what creates the current stress.unability to manage crisis.their gouvernance is worse than ours.....they think that in the long term they will make it.they continue to underestimate the global banking system systemic risk...
    14 Dec 2011, 02:46 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs