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14 Comments on Banks are holding onto their cash reserves and lending less
I hear ya! I guess we all need lots of mortgage people in our contacts!
Charles,
I'm hearing this a lot on Active Rain. That was not the intent.
My thoughts re tht this just isnot right...these dollars they are sitting on is taxpayer dollars...they need to cut loose with the inventory of REOs and with more mortgges...
It is the difficulty reading the Fed and the regulators and what they are changing the rules to. Both is the amount of reserves that are changing and the fact that the Fed need to collect 3 yrs up from in premium payments. That takes the banks money and they cannot lend.
Tricia
Tighter lending requirements is not necessarily a bad thing, but it does seem the banks are being overly cautious at the expense of the economy.
Terry
It was definitely not the intent of the bailout.
John
In the long run it doesn't seem like it is in the banks best interest and it certainly isn't in the best interest of the public.
Charles, I had no idea this retraction in lending was so great. The TARP funds were provided with very few strings as I understand it.
Steve
I was suprised to see this article as well. This coupled with holding onto more cash than what is required makes me wonder. There may be some legitimate reasons, love to hear what they are.
After bailing out the banks, it would seem that banks would do what they can to help insure that taxpayers were able to borrow if they were qualified.
Charles - Perhaps some of the American banks are keeping excess funds to minimize losses and to pay back government loans so that they can get back to paying large bonuses to senior management.
Our banking system is a mess, this is a perfect example, where did the bail out money come from, the taxpayer. One would think the prudent thing to do would to be use the money to help out the taxpayer.
Charles,
I think it is great when we read posts like this to make us think... is it waddling, is it quacking, is it a duck? What is this telling us..... Tells me something with the articles you have to support the post. NOW... when people read it what is it they will do to modify behavior and prepare?
Theodora
It does make me wonder.
Marc
You may well be right. The tight lending policies and build up of excess of funds leads me to wonder. There may well be responsible motives for maintaining a large excess in funds.
Gerry
It does cause you to rethink the wisdom of the bailout plan and how the money has been used. Of course hind sight is always much easier.
Carra
Thank you. Individually these facts didn't seem to matter as much, but putting it together causes me some concern as to what is really going on here. I wanted to share this with the community to get there take on it as well.
I think they need that $210 billion in order to pay themselves Christmas bonuses for having such a good 2009.
Jim
Not sure that will be enough to pay their bonuses, but it is a good start.