Bank of Nova Scotia T.BNS

Interest rate cut

[Goldluck]

A  rate cut should help bank stocks.

[MrBinks]

I also thought the BOC rate cut would help raise bank stocks, but that hasn't been the case. Anyone have an opinion as to the reason BNS has actually declined tsince the rate cut?

[DeanEdmonton]

Actually, that is incorrect. Banks generally have a better Net Interest Margin when rates are higher. Once rates get really low that margin tends to shrink. You can't pay less than 0 on savings, though a couple of banks tried to and got resoundingly thrashed for it, and you can only drop GIC rates so low, before no one will deposit money in them. No GICs makes it hard to match fund the fixed

[MrBinks]

Generally speaking, Higher interest rates are good for babank stocks, but in this case, interest rates were so high that a rate cut was needed to stimulate financial flow. I believe the BOC rate cuts will have a positive impact on bank stocks, but it will take some time for the money to flow. People and business need to feel comfortable with the interest rate before they start buying homes and

[Goldluck]

Lower interest means more mortgages, more lending.  That's how banks make money, they are essentially loan sharks working within the legal framework.  It's no coincidence that all banks stocks went down as interest rates were rising. 

[Runner117]

Hi  my opinion interest rates increased  so quickly that borrowers and the banks didn't have time to Adjust