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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (66489)	8/20/1999 4:13:00 PM
From: PaperChase	Read Replies (2) \| Respond to of 132070

>>When evaluating the role of the central banks it is important to remember that commercial banks create loans if they are willing and able to extend loans to customers who are willing and able to take a loan.<< I disagree. Commercial banks create loans when the federal regulatory agencies (FDIC and mostly OCC) allow them to. The government "tells" the banks when to make the loans and when not to. In the banking world, the mere absence of any enforced regulation, is in fact the government signaling the banks to lend. Money is like candy to the borrowers of banks and they will take the same amount whether Prime is 8% or 10%. >> The other important point is the fact that financial sector ( nonbank) has created more credit than the banking sector in 1998..<< The role of commercial banks has been fundamentally changed for over a decade. Since bankers proved incompetents under the long term view of lending, there role has been minimized to be back seat players. The real lending always has been and always will be from the private sector. That is why GE Capital has become the behemoth it is.