James Grant - The art of banking is always to balance the risk of a run with the reward o

The art of banking is always to balance the risk of a run with the reward of a profit. The tantalizing factor in the equation is that riskier borrowers pay higher interest rates. Ultimate safety - a strongbox full of currency - would avail the banker nothing. Maximum risk - a portfolio of loans to prospective bankrupts at usurious interest rates - would invite disaster. A good banker safely and profitably treads the middle ground.

- James Grant

topic: Running, Art, Safety, Borrowers, Tantalizing, Interest Rate