Professor William Black:

That is a wonderful question. Let us look at the counter-factual. What if you try to grow very rapidly and charge a premium nominal interest rate by making good loans in a relatively competitive industry such as banking with a mature product? In other words, it is not like the invention of the iPad for the first time, when you could sell it to billions of people. If you wanted to grow 50% a year by making really good loans, what would you have to do? You would have to buy market share and reduce your interest rate to be able to get really good borrowers and their business. Good borrowers find it very easy to buy and get loans in normal times. What would your competitors do when you chopped your interest rates?