Why Banks Aren’t Lending: Weak Economy, Regulatory Uncertainty
U.S. banks got hammered last week on concerns the sovereign debt crisis in Europe coupled with slow growth and a weak U.S. consumer are setting the stage for another financial crisis. U.S. banks still have some troubling legacy assets on their balance sheets but for the most part they are in much healthier shape then back in 2008, says John Garvey head of U.S. banks and capital markets at PricewaterhouseCoopers. “The banks have made pretty significant steps in the last couple of years to improve their stability in terms of their funding sources, in terms of capital.”
If banks are better shape then why aren’t they lending? Wasn’t the point of TARP and the rest of the bailouts to ensure banks could lend and support the economy?
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