Tag Archives: finance loans

Banks Not Lending As They Should

It appears that U.S. banks do not want anyone to either lender or borrower be. July 28, 2009 Source Credit is the engine of economies. And in an economy with the characteristics of the U.S. economy, it is yet. It is for this reason that the speed and strength to be the U.S. economic recovery is largely linked to the resilience of the financing.

a For the moment, and begin to receive the first rays of light reflecting the recovering economy, but these rays are not powered by the U.S. financial system. a An analysis by the Wall Street Journal shows that the value of the credit stock of top 15 U.S. banks have registered a fall of 2.8% during the second quarter. The importance of this analysis is not less because these 15 entities account for 47% of total deposits at the national level, and have received U.S. $ 182,500 million in aid through the Voluntary Purchase Program Capital (Asset Relief Program a “TARP) a when looking for explanations, all appear as valid, given the corrosive effect that the subprime crisis has had on the entire U.S. economy (albeit uneven across various economic sectors and segments of the population) a An initial investigation seems to throw the bankers and the private sector have agreed. Banks do not want to lend and businesses and families do not want to borrow.

This coincidence creates a bad deal for both parties and particularly for the prospects of economic recovery. a Why U.S. banks do not want to borrow? In reality what is happening according to David Enrich and Dan pose Fitzpatrick in the article they wrote for the Wall Street Journal, is that it is limiting the credit to maintain sufficient capital to finish cleaning up bank balance sheets for losses caused by the crisis.