Obviously profit is a big motive but wouldn't the big shift to demand deposit (checking) accounts over the past 3 years be enough to keep banks like BOA afloat in profits and reserves? Below is a graph I made showing demand deposits' growing share of M1 money supply since the stock market crash. The initial outrage last year occured durring one of the greatest increases in demand deposits, nearly $200 billion increase over a two month period (bank transfer day?), and during a time when BOA saw its credit downgraded. They then shifted $22 trillion of Merill derivatives to FDIC accounts, which didn't cause near the outrage of the $5 checking fee.
Fascism wins. As somebody who paid attention when the Fed put us on the line for BoA's failing operations in the European derivatives market, I'm completely unsurprised by their actions and the government's enabling.
You have to say, the Fed has been good at doing what it was mandated to do---protect the current system. The current financial system is flawed beyond reason, and why the Fed and the Treasury Department chose to maintain this particular cast of characters as financial intermediaries is questionable. However, I have to tip my hat to the Fed in terms of insulating the system from macroeconomic shocks, which is what what it is supposed to do. As for the rest, well---13 Bankers is an informative and insightful read into why this "system" has been chosen to prosper.
