The world’s biggest banks are getting ready to go on strike, as the world’s two largest financial institutions are planning to end their direct deposit (DD) and lending services for the first time in almost a decade.
This comes as the global financial crisis is set to get worse, which is putting pressure on banks to offer a more stable and secure way to invest in the global economy.
The two largest banks, the Bank of America (NYSE:BA) and JPMorgan Chase (NYSE :JPM), said on Tuesday they would end direct deposit services for more than 10 years.
They said they will replace them with a “preferred lending mechanism” in the years to come.
This means they will use their profits to invest and invest their savings in high-growth sectors like technology and real estate, instead of depositing and lending money to the financial system.
This move is expected to hit the big banks harder than the average taxpayer.
While the big financial institutions currently have an effective tax rate of around 31%, the current tax rate on profits of the big three is just 4%.
The tax rate paid by the average American family has been reduced by roughly 30%.
The combined tax rate is now just 20%.
If banks do end their Direct Deposit and lending service, they will also have to close other parts of their businesses like retail, insurance and finance.
They will also be forced to close their own U.S. operations.
This will be a tough blow to banks.