As you have read, and may agree, “the large number of banks in the commercial ba

Question

As you have read, and may agree, “the large number of banks in the commercial banking industry and the absence of a few dominant firms suggests that commercial banking is more competitive than other industries”. Yet many of us prefer the “Thrift Industry” selection. Why? Which institutions do you prefer and why? Are others in this class using different financial institutions than yourself affecting rates you receive? How did you decide on where you bank now, and why is it better than everyone else’ choice? What are the rest of us missing?

Explanation / Answer

1. Thrifts are preferred because of it's business model to retain loan portfolios and not securitise the same, as done by Commercial Banks. Hence, customers with unique loan requirements easily secure loans with thrifts thann a commercial bank.

2. I prefer commercial banks becuase they levy less interests on laons unlike the thrift or credit unions.

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