Yes they do. Do you think a company is going to set themselves for a best case scenario of breaking even? Or just take a 25% hit to profit unless they absolutely need to?

I just look at Wells Faro, and they have $900 billion in interest bearing deposits. With NI of $16 billion, just going up to 1% will wipe out 55% of profit.

I don't think I articulated myself well, I wasn't taking a judgement. There is no logical inference that a company needs (or deserves) the profit margin it had last year, for example, that's just a fact of business.

My point was essentially to stay viable, the bank needs to have some profit margin. Here is a classic business choice between maintaining or improving profit margin, and maintaining or improving services.

So my point was they could obviously remaining viable while offering higher rates, they choose not to because it increases short term profit - if they think they are losing enough business to other banks with better rates, presumably they will start raising them to compete.

The fact that they can't really meet current federal rates and stay profitable is interesting, it suggests they have some pretty heavy cost centers to carry.