Tuesday, October 28, 2008
Still no lending, bailouts to banks going under their matress
The dirty little secret of the government’s $250 billion handout to nine banks to get them lending again is this: So far, they have stuffed it under their mattress like the rest of us. Need a mortgage? An auto loan? If you are a business or consumer, it’s almost as hard to get a loan this week as it was last. “It doesn’t matter how much Hank Paulson gives us,” said an influential senior official at a big bank that received money from the government, “no one is going to lend a nickel until the economy turns.” I bet UK banks are no different, despite the little clause that makes banks lend at 2007 levels in the UK bailout agreement.