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Banks not lend-friendly post-bailout
Left to right: Goldman Sachs CEO Lloyd Blankfein, American Express CEO Ken Chenault, Bank of America CEO Ken Lewis and American Bankers Association President and CEO Edward Yingling arrive at the White House in Washington, D.C.
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TEXT OF STORY
Steve Chiotakis: B of A of course joins Wells Fargo, Citi, JP Morgan Chase and even Goldman Sachs in reporting better-than-expected numbers. Turns out banks haven't been as lend-friendly as even the government thought. All that bailout money and apparently it hasn't done much to open up credit. Here's Marketplace's senior business correspondent Bob Moon.
Bob Moon: In releasing its latest bank-lending numbers, the Treasury Department pointed to what it called "relatively steady overall lending levels." But that upbeat assessment didn't carry over to President Obama's view as he spoke to reporters in Trinidad yesterday:
President Barack Obama: This is still a difficult time for the economy. Credit is still contracted. Banks still are not lending at previous levels.
In fact, the Wall Street Journal takes a closer look at the data this morning and reports the Treasury spin was a lot rosier than what the numbers show. The paper says all but three of the biggest recipients of government assistance originated fewer loans in February -- 23 percent fewer overall -- than they did before they got the federal bailout funds.
The president is vowing to ensure accountability for the taxpayer funds -- and served notice yesterday that he wants to see results:
President Obama: I'm not going to simply put taxpayer money into a black hole.
The Treasury Department said last week the situation could be even worse without the government's cash infusions. The banks insist they're eager to lend. They contend demand for loans is down.
I'm Bob Moon for Marketplace.
Ooops. Disconnect alert!
Story after story tells of well-qualified buyers unable to secure loans for such disparate things as college loans, homes, cars and credit cards.
Why?
Banks don't want to loan.
Enter this story, concluded with the last two sentences: "The banks insist they're eager to lend. They contend demand for loans is down."
Is this test to see if we've been paying attention? Or maybe it's a riddle: a banking chicken-and-egg thing.
Demand for loans is down because banks don't given them. Banks don't give them because demand is down.
What?
