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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (38520)	11/13/2009 5:04:41 PM
From: TimF	Read Replies (1) \| Respond to of 71588

No. Irrespective of any bailouts.... Fed Funds is a subsidized (below market rate) borrowing program for the banking sector. As designed. That's a subsidy whatever they do with the money, and its an issue of the feds giving them a lower rate not one of the decisions of the banks as to who to lend or how much to lend. Its not directly subsidizing their loans its a general subsidy for the banks. If you like the subsidy than I guess its fine by you. If you don't like it then argue to restrict or end it. Also banks can borrow from other sources. (In fact they do, bank companies sell bonds, and take deposits.) And the "too-large-to-be-allowed-to-fail" banks have only increased their advantage over the smaller banks as a result of preferential access to Fed liquidity support. Then don't give them preferential access.