So what basic principle does this boil down to, though? To keep the bank from suffering and horrible things happening, they need to not merely profit but make a profit equal or greater to last year's, every year?
Right now, BoA just needs to make a profit. Thinking in a broader way, though, the basic principle is one of growth. A bank deals primarily with money, so they're looking for continued financial growth - thus, this would appear to be a choice that they're making specifically to continue growing this portion of their business fiscally. Whether this is actually the smarter route will remain to be seen, but I have a feeling the mathematical equation is much more favorable to them than the theoretical example I tossed out there.
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Date: 1/10/11 00:11 (UTC)Right now, BoA just needs to make a profit. Thinking in a broader way, though, the basic principle is one of growth. A bank deals primarily with money, so they're looking for continued financial growth - thus, this would appear to be a choice that they're making specifically to continue growing this portion of their business fiscally. Whether this is actually the smarter route will remain to be seen, but I have a feeling the mathematical equation is much more favorable to them than the theoretical example I tossed out there.