We have not written too much about the banks here at theOptionsEdge.Com as a rising rate environment is not good for banks. We know, we know, we know. The financial media has been saying that rising interest rates will be good for banks. That statement is clear, but it ignores history. What matters is lending spreads and they tend to be fairly steady over time as the cost of funds rises and falls with a bank's lending income. At the same time, banks have tended to do better when rates fall as it encourages loan growth, fees from refinancing tend to rise and it becomes easier for borrowers to repay their debts.
