
Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
The 3-6-3 Rule
Bank managers used to operate on the 3-6-3 rule: borrow at 3%, lend at 6% and be on the golf course by 3pm. Ultra-low interest rates and QE has pushed
down the spread between the cost of borrowing and lending which has had a detrimental effect on their net interest margins. Rising bond yields relieve
this pressure, and this combined with far fewer fines, an easing of the regulatory environment and cost cutting means that earnings are growing again.