Banking: Prime Contest

Ever since the prime rate appeared in the '30s as a measure of what the bluest-chip corporations must pay for a bank loan, commercial banks have agreed about what that interest charge should be. Sometimes it has taken a few days; once, in 1958, it took a week for the pacemaking banks to fall in line with a lower rate. But for a fortnight some 40 of the nation's biggest banks have, to their consternation, found themselves in an unexpected battle over "the prime" with Chase Manhattan, New York City's biggest and the nation's second largest bank.

Chase dropped a bomb...

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