<story><title>Banks are slow to increase rates on savings accounts, but quick to reduce them</title><url>http://jpkoning.blogspot.com/2020/06/banks-are-slow-to-increase-rates-on.html</url></story><parent_chain><item><author>save_ferris</author><text>This seems like pretty typical market behavior to me. Are we really surprised that banks are taking the opportunity to increase their profits by choosing not to pass down all savings to customers?&lt;p&gt;The same exact thing happens with gas stations. The price of gas never falls quite as fast or far for the consumer as it does for the retailer, but gas stations will instantly respond to price increases. I’m sure there are dozens of other examples of this.</text></item></parent_chain><comment><author>learnstats2</author><text>Doesn&amp;#x27;t this just prove that there is not a competitive market in these industries?&lt;p&gt;If I - and everyone else - could quickly identify which bank&amp;#x2F;gas station was acting in my interest without colluding, I would immediately switch.&lt;p&gt;The fact that prices are quick to rise but slow to fall is dependent on consumer apathy and monopolistic behaviour&amp;#x2F;collusion.&lt;p&gt;It might be typical market behaviour, but it&amp;#x27;s not the perfect market that economists commonly base their models on.</text></comment>
<story><title>Banks are slow to increase rates on savings accounts, but quick to reduce them</title><url>http://jpkoning.blogspot.com/2020/06/banks-are-slow-to-increase-rates-on.html</url></story><parent_chain><item><author>save_ferris</author><text>This seems like pretty typical market behavior to me. Are we really surprised that banks are taking the opportunity to increase their profits by choosing not to pass down all savings to customers?&lt;p&gt;The same exact thing happens with gas stations. The price of gas never falls quite as fast or far for the consumer as it does for the retailer, but gas stations will instantly respond to price increases. I’m sure there are dozens of other examples of this.</text></item></parent_chain><comment><author>leetrout</author><text>I heard this story &amp;#x2F; explanation before:&lt;p&gt;You own a gas station and you want to fill up your tanks so you call the distributor and pay $1 &amp;#x2F; gallon. You then sell that for $1.10 &amp;#x2F; gallon making a 10% profit.&lt;p&gt;Now prices of crude doubles and you have 1000 gallons left to sell. It’s going to cost you $2 &amp;#x2F; gal to refill so you immediately raise your price to prevent a loss and cover the next fill.&lt;p&gt;I don’t know how accurate that is to the real situation gas stations face but I’d never thought of it in terms of selling higher to afford the next bulk delivery.</text></comment>