Are banks not lending because they're already out of compliance?

[Festivito]

Banks must keep 10% of their lending in their vault. Knowing this current banking scandal means they are more than likely overly leveraged, i.e. under their 10% minimum, they are LENDING NOTHING for fear a bank examiner would out them at any time. In fact, they could be extorted by the Bush admin during this time.

Result. We have no lending at the moment.

Solution. We have to run our own bank, or go through every paper.

[niceypoo]

1. They arent lending because the same thieves who got them where they are...

...are still running them. Congress is not holding their feet to the fire.

[Lasher]

2. No, I don't think that's it. Or at least not all of it.

They have been investing bailout money in Treasury Bonds. If this were simply a matter of keeping adequate cash in the vaults, they wouldn't be buying the bonds. Pretty sweet deal for them. They simply pocket the difference.

You have to wonder just how this arrangement works to the advantage of anyone except the bankers.

[European Socialist]

3. They don't want to lend because they have no confidence....

in the economy--They know recovery is a long way off.