If all the burghers of Small Town USA get together and say “we want a local bank that lends to our small businesses and sponsors our parades,” the answer is “okay just keep your money on deposit there earning 0% interest.” And if they say “no we can get 5% on our money-market funds” then the answer is “okay no parades for you then.” (Or: “Fine, but take some of the interest you get from your money-market funds and contribute them to the parade fund, or the Kickstarter for your small businesses.”) You can have the unconscious economic coordination of local banking, or you can use modern technology to squeeze every basis point out of your cash, but not both. Sometimes an unrealized profit is an unrealized benefit to you through some other means

Money Stuff: Small Banks Don’t Like High Rates
from Matt Levine ✉️