By Pete the Banker: President Obama reiterated his call Monday for the nation’s banks to increase lending, saying that he was getting too many letters from small businesses unable to borrow money proclaiming,
‘s banks received extraordinary assistance” from the government, Obama said at a press conference following a meeting with the heads of the largest banks.”Now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.””
“The president and his advisers have responded in recent days with a burst of heated rhetoric, arguing that the government rescued the banking industry and that banks now are failing to show proper gratitude. The amount of money on loan from banks fell by almost $600 billion, or 7.2 percent, from September 2008 to September 2009, according to the Federal Deposit Insurance Corp. Lending to businesses, excluding construction loans, fell 15 percent.”
Obama blames banks for not lending. Being recipients of TARP funds, the banks are apparently supposed to be compliant to the President, subordinating their own interest to Administration policy imperatives, simply acting as conduits in passing the TARP funds along with their own funds to those preferred businesses and the public regardless of the bank’s own accountability to operate as a going concern, repay the Government TARP infusion, and honoring their obligations to shareholders, other creditors and customers.
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