SOS World Trade Per Day

Total world trade per day is about USD4 trillion.

Imagine how much does a bank earned? Every transaction in USD, if converted, will be charged by the financial institution of conversion gain. Imagine, if on average 0.01% is charged on USD4 trillion, USD40 million is made by some banks each day.

Say, if we trade 250 days a year, the amount made by a bank is about USD10 billion a year. The bank absolutely does not add value in an economic send, no additional service or goods produced.

Does the financial institution actually add much value to the industry? Not much actually. They are intermediatries which keeps the depositors money at low interest and using Fractional Reserve Basis to lend out at 10 times its deposit and at interest rate normally double to triple the deposit rates.

Hundred years ago in China when financial intitutions do not exist, the Chinese use a rotation schemes among one another to raise money for whatever reasons. Each one benefits when the other chip in their their shares and the lender will pay a certain interest into the group.

MyView

Commercial banks gets its capital from taxpayers. Using the Fractional Reserve system, it raise 10 times the taxpayers money and lend to corporations (which is also own by taxpayers). A major assumption is a commercial bank is that when there is a bank run, there is FDIC (insurance) and cetral bank (lender of last resort) to "bailout the banks". In return, if there is not enough funds in FDIC, the congressmen will go to the government to get more money, which in return obtained from tax payers.

The only people gain in this banking system is the Executive bankers who will go all out to take risks at the expense of the taxpayers, knowing the government would not let the banking system to fail.