Even if banks receive bailouts, why are they pressured to lend?

Discussion in 'Economics' started by crgarcia, Jan 27, 2009.

  1. Why lend indiscriminately again?
    Didn't they learn the lesson?

    Banks lending now would only lead to the next bubble.
  2. They've gone to the completely opposite extreme, now. Basically to get any loan you already have to have the equivalent amount in cash to acquire the loan, which defeats the purpose of even having a bank. At least we're not going back to a barter based system....

    It's like saying,


    So you'd like a $100,000 loan, huh? Well, do you already have $100,000?


    No, that's why I wanted to borrow from you.


    Sorry, we can't make the loan because of insufficient collateral

    I think that gets the point across, right?
  3. you missed some other questions -
    bank - why do you need 100 000?

    you: eh, just to buy new plasma, vacation, renovation etc..

    bank: do you have job?

    you: no

    bank: do you have assets?

    you: no

    bank: do you have plan to pay back?

    you: no

    Bank: sorry we can't give you a loan

    you: f-king bastards, they want to kill economy by not giving loans, government help!!!
  4. e#21


    is that what people do in iran?
  5. I can see it from both sides being the reasonable person that I am.:)

    Banks IMO should NOT be required to loan money indiscriminately, or we find ourselfs in the mess that we do today.

    On the other hand, if a bank doesn't want to loan money at all, we should ask they why they are in that business at all then. That would be like a realtor not wanting to advertise your house because it might not make them enough money - if they did that you would move on to other realtors, but what if they all did that - you could sell the house yourself, but if all banks don't lend money you are stuck.

    I think a compromise is needed where there are standards such as if a person:
    makes x money
    has y credit
    has z collateral
    etc, etc.
    Bank should loan up to X dollars at x term for x%. If the bank "doesn't want to", bank risks losing certain govt. benefits that banks may get (tax incentives, whatever).

    In other words, if you make say $100K a year, have good credit and want to buy a house for $300K, one bank can't just turn you down because they feel like it. If you qualify - you qualify. It's almost like we need a national set of standards and if you are verified to qualify then you just go to whatever bank you want.

    Hopefully I am wording this right. I understand the banks side, but I do think they need to lend or they can just go ahead and shut down and let someone else lend out money.

  6. or more specifically:

    1) you need a loan? Sorry, we cannot do that.

    2) you don't need a loan? You want one?