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Q.

What is 3-6-3 Rule in banking parlance?

Tags: money, relationships, rule
Asked by Lost Soul, 27 Oct '11 02:46 pm
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Answers (5)

1.

The 3-6-3 rule describes how bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm. This alludes to how a bank's only form of business is lending out money at a higher rate than what it is paying out to its depositors.
Source: .investopedia.com
Answered by LIPSIKA, 27 Oct '11 03:10 pm

 
  
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2.

This is a banking lingo. Actually it is a banking slang mainly from USA. This Slang used to refer to an "unofficial rule" under which the banking industry once operated, which alludes to it being noncompetitive and simplistic.The 3-6-3 rule describes how bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm. This alludes to how a bank's only form of business is lending out money at a higher rate than what it is paying out to its depositors. Many attribute the problems faced by the banking industry during the events that lead up to the Great Depression as reasons why the government implemented tighter banking regulations. These regulations controlled the rates at which banks can lend and borrow money. Unfortunately, the regulations made it difficult for banks to compete with each other and the banking industry became stagnant. However, with the loosening of banking regulations and the widespread adoption of infor ...more
Answered by Chandra sekhar Krishnan, 27 Oct '11 02:51 pm

 
  
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3.

Once the economy rebounded strongly after World War II, banking became a boring business that one analyst called 3-6-3 bankingpay your depositors 3%, lend at 6%, and be on the golf course by 3 PM. Savings and Loans banks were particularly hemmed in by regulations that limited what they could pay depositors and the fact that they lent money for long periods of time (they were predominantly home mortgage lenders). The high inflation of the 1970s put them in an untenable position such that in 1980, 85% of the 3,800 federally-chartered S&Ls were losing money.
Source: http://perspectives.thirdway.org/?p=191
Answered by klm, 27 Oct '11 05:15 pm

 
  
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4.

The 3-6-3 rule describes how bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm
Answered by aflatoon, 27 Oct '11 04:39 pm

 
  
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5.

Slang used to refer to an "unofficial rule" under which the banking industry once operated, which alludes to it being noncompetitive and simplistic.

The 3-6-3 rule describes how bankers would give 3% interest on depositors' accounts, lend the depositors money at 6% interest and then be playing golf at 3pm. This alludes to how a bank's only form of business is lending out money at a higher rate than what it is paying out to its depositors.
Answered by Stone, 27 Oct '11 02:51 pm

 
  
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