Are certificates of deposit a good investment in 2019?

Depends, but generally speaking, the answer is No. It has been no in 1973, a no in 1984, a no in 1999, a no in 2013 and will be a no for the years to come. A CD or certificate of deposit is perhaps the lowest risk, lowest yield form of investment vehicle available to […]

Read More

How did banks do bank to bank transfers before TELEX or SWIFT?

Wire transfers (which meant Morse-code type transfers over the wire) and these go quite a ways back. Before that? Good ol’ ledger comparison. Bankers would meet regularly and do inter ledger settlements. How much do you have? How much do I have? How much do I owe you? How much do you owe me? Then […]

Read More

Why don’t banks process transactions on Sunday?

Historically, Sunday has been a day of rest. A holiday in most of the Christian countries around the world. Banking was done during the 6-day work week before the 5 day work week was adopted in many countries, but Sunday was always off. As the world got more and more electronic and connected, you have […]

Read More

What are US money transmitters doing to survive de-risking? How are they going about getting banking or surviving without banking? Any improvisations?

Those with money transmitter licenses will survive the derisking, but not on their terms. The entire derisking exercise is becoming more costly and is forcing more expensive access to banking for those that have a license and need to continue with banking. It is also trimming the edges. That means weak or smaller players are throwing in […]

Read More

How did travelers (e.g., aristocrats on their continental tours) access funds before the invention of credit cards and global banks? There were no ATMs and presumably carrying enough cash to last the whole trip would’ve been too dangerous.

Credit Lines. In the olden days, if you were traveling outside your banking circle so to speak, you took with you credit notes that were honored in various other cities. Sometimes these notes were coded, sometimes they were carried by external couriers in advance and sometimes you carried it yourself. That is the whole premise […]

Read More

When transferring money to a foreign bank in a different currency, which bank converts the currency, the sending bank or the receiving bank? Whose rates are applied?

In most cases, the currency is converted by the receiving bank. In such a scenario, the sending/receiving bank have a direct correspondent agreement and the receiving bank provides the exchange rate into the local currency and does the conversion. In the event a middle, correspondent bank is used, same result again, the receiving bank provides […]

Read More