Big Bailout Banks Slashed New Lending In January

[girl gone mad]

Big Bailout Banks Slashed New Lending In January

WASHINGTON — The Treasury Department said Monday that new lending plummeted in January at the nine largest banks that have yet to repay their taxpayer bailouts.

Treasury's monthly survey of bank lending shows overall new loan origination dropped 35 percent from December's level. Treasury says the drop "may be partially explained by large increases" in late 2009.

The survey also shows that average loan balances at the nine banks were 2 percent higher than in December – bringing them to their highest level since September.

The nine banks are: Citigroup Inc., Comerica Inc., Fifth Third Bancorp, Hartford Financial Services Group Inc., KeyCorp, Marshall & Ilsley Corp., PNC Financial Services Group Inc., Regions Financial Corp. and Suntrust Banks Inc.

Increasing lending to consumers and small businesses was one of Congress' stated goals when it passed the $700 billion financial bailout in October 2008.

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[Tippy]

1. Sock it toum on the reforms NOW....

[RandomThoughts]

2. After seeing the picture in that article, Could someone answer something for me.

It is a bit of a tangent, but I have wondered for awhile about some of the false claims of people that smear Jewish people.

My remembrance of scripture says that the corrupt people copied the ways of the egyptians when leaving egypt and made a Golden Calf, and that was bad.

So why do people keep blaming Jewish people, or saying bankers are Jewish people?

I don't understand that, what Jewish person would put a statue of a golden bull outside his house?

Why do some people blame Jewish people for things like money issues or running banks? I don't think they are following Jewish tradition or learning.


If someone could answer that I would appreciate it. i think Jewish tradition is against giving wordly things credit for the wonders of God also.

Exodus 32:
7And the LORD said unto Moses, Go, get thee down; for thy people, which thou broughtest out of the land of Egypt, have corrupted themselves:

8They have turned aside quickly out of the way which I commanded them: they have made them a molten calf, and have worshipped it, and have sacrificed thereunto, and said, These be thy gods, O Israel, which have brought thee up out of the land of Egypt.

[theoldman]

3. In Europe the Jews were the first bankers.

They could loan money and charge interest because the Christian said it was against their religious beliefs to charge interest. No one loves the guy who has control over you and this is what happens when you borrow money.

[econoclast]

4. If they had the free capital .....

2 points.

#1. The reason these banks haven't repaid the TARP money yet is that they NEED it to shore up their capital base. Thats the reason Congress had to extend the bailout to them. They needed the capital to survive. They need it still. Hence they aren't lending.

Consider ....

Currently they are holding the TARP money as free reserves with the Fed. In the risk-weighted capital calculations, these assets considered risk-free.

But if they LEND these funds, they exchange a risk-free asset ( the reserves at the Fed ) for a riskier one ( the new loan ). The risk-weighted capital calculations now require that they have MORE capital to support the new risky asset. They can't do that. They NEED the free reserves to support the risky assets they already have. The LAST thing they need is to use them to take on yet MORE risk. They need a coupl'a years of earnings to earn the cash necessary to replace the TARP funds as required capital.

#2. It isn't at all clear to me that there is very much loan demand. Even if they wanted to lend, which as per #1 I don't think they can at the moment, I don't think there are very many people who are looking to borrow at present. Despite the talking heads saying we have to increase bank lending to small business, the most recent Small Business statistics I have seen do NOT indicate that Small Businesses that want to borrow are having difficulty finding financing. Rather, they are still in hunker-down mode and most are not yet inclined to borrow.

At the moment, Cash is King.