2009-02-26cnbc.com

The government's "stress-test" of the nation's largest banks could end up discouraging lending as banks hoard cash to appear healthier to regulators, banking analysts say.

The reason: most banks want to avoid taking more government money because of the onerous restrictions the government places on the funds. As a result, they are likely to become even more conservative with their money and pull back on lending—defeating a major goal of the bank bailout in the first place.

It is really quite breathtaking watching the chaos and destruction that sheer intervention wreaks in an otherwise free-market economy.


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Comments:

catherine at 19:10 2009-02-26 said:
when was the last time FRANK OR DODD OR SCHUMER OR OBAMANATION EVER RAN A PROFITABLE BUSINESS

people want to drill AND PUT THEIR FAMILIES in big safe cars

small cars smashed like a sardine with your beloved family inside, what do that as an honor to Barney Frank?

we see how well they are going to run the banks next

who wants the IRS guy in charge of your kid's healthcare, that is next for these bozos Permalink

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