Word: interest
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Dates: during 1970-1979
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...solar "bank" to subsidize and lower the interest charged by commercial institutions for loans to buy solar equipment. The Administration forecasts that the bank, which will have initial funding of $100 million, will result in more than 100,000 new solar units each year...
That means it won't pay off its cost for nearly 30 years, not counting interest or inflation...
...thrifts are nervous because for the first time since the early 1970s, when interest rates surged on the eve of the 1973-74 recession, they have been losing deposits in a big way. April, for instance, is normally a poor month for the savings banks, since their customers commonly make large withdrawals to pay taxes. But April 1979 was by far the cruelest ever: nationwide, savings and loan institutions lost $1.5 billion in deposits (vs. an increase of $400 million last year). They gained back $1.2 billion in May, but that was considerably below last year's more normal...
...Savings banks," says Saul Klaman, president of the National Association of Mutual Savings Banks, "have the worst of both worlds, high interest costs and disintermediation." Disintermediation is bankers' jargon for loss of deposits to higher yielding investments, such as Treasury bills. For a while, savings officials thought that this had been averted through the introduction in mid-1978 of six-month money-market certificates (M.M.C.s), whose payout is tied to the going Treasury-bill rate, currently 8.87% for six-month bills. But the M.M.C.s did not bring in just new money; they also attracted funds that the thrifts already...
...thrifts feel threatened by a new development: a conviction in Washington that the small saver should no longer subsidize the mortgage borrower. Under pressure from the Gray Panthers' senior citizens' lobby, the Administration has proposed the lifting of interest ceilings on savings deposits and has urged that all federally chartered savings banks offer interest-bearing checking accounts. Last week Treasury Secretary Michael Blumenthal endorsed Senate legislation to phase out ceilings over a ten-year period...