Summary
Some would call on the government to force banks to make more loans, [Regalia] said, but that's been tried before, and it doesn't work. "We tried to force them to lend money to people who couldn't pay it back, and that wasn't a real good thing to do."
So how long will it take? "I think it will take six months or so, and we'll gradually, over the course of the next six months, see more and more in the way of lending. And then in the six months after that, you're going to see the banks gradually return to their more normal lending approaches. But right now, they're scared of running short of liquidity, there's a lot of uncertainty they're facing in what kind of taxes they're going to be paying, what kind of restrictions they're going to be operating under."It's kind of like the guy who explained to me how to play golf: 'Marty, just try not to hit two bad shots in a row, and you'll get around the course.'"And that's what the bankers are trying to do: They've hit a really lousy shot, and they are trying not to hit the second one in a row. And they are going to be somewhat more circumspect in their lending right now than they would have been two or three years ago. It's just going to take time to get back."See the full content of this document
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Bank Lending Will Improve - Slowly
IF YOU'RE LOOKING for working capital for your small business, don't count on getting it from your local banker anytime soon, says a leading economist. Martin Regalia, chief econ...
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