Big Banks to America’s Firms: We Don’t Want Your Cash Profit-crunching low interest rates have banks judging cash too costly to keep

The Wall Street Journal reports:

U.S. banks are going to new lengths to ward off a surprising threat to their financial health: big cash deposits.

State Street Corp. , the Boston bank that manages assets for institutional investors, for the first time has begun charging some customers for large dollar deposits, people familiar with the matter said. J.P. Morgan Chase & Co., the nation’s largest bank by assets, has cut unwanted deposits by more than $150 billion this year, in part by charging fees.

The developments underscore a deepening conflict over cash. Many businesses have large sums on hand and opportunities to profitably invest it appear scarce. But banks don’t want certain kinds of cash either, judging it costly to keep, and some are imposing fees after jawboning customers to move it.

The banks’ actions are driven by profit-crunching low interest rates and regulations adopted since the financial crisis to gird banks against funding disruptions.

The struggles of the un-free market in banking.