The title says it all. Obama has challenged top bankers to find "every possible way" to increase lending. He says that it is the responsibility of the banks to do so after being rescued by taxpayers. He asked the banks to "take a third and fourth look" at their small-business lending.
Do you guys think that banks increasing their lending is a good idea?
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He says that the banks should lend more,
So we Americans can spend more,
Go grab your plastic,
Let's do something drastic!
Go buy a GE or a Kenmore.
Nice rhyming.
I think banks have an obligation to increase lending to small businesses. Small businesses did not receive a government bailout--when the economy went south, they were left to deal by themselves. The banks just have to make sure that they are lending responsibly, which may require government regulation.
I think this will stimulate the economy... maybe. Although, if the banks aren't carful it could put the economy in way worse shape and even lead to a depression. So, I agree with Sarah. The banks would definitely need government regulation and be as responsible about it as possible.
I believe that the banks would have no incentives to increase their lending. After all banks are a business. They are there to make money and if lending money would not benefit them, they probably will not do it. If the president gives banks some sort of benefit or reward, they might have a better chance to be willing to lend money to small businesses.
I think it is a good idea for banks to increase their lending. If all goes well, then it would raise the money supply and help get out of the recession. Also if he really wanted to increase lending across the board then he'd want to lower interest rates (which the Fed controls) which would give more people the incentive to take out loans.
The comment about taking a third and fourth look at small business lending reminded me of that Jim Carrey movie that came out a couple of years ago. Yesman! As I recall he worked at a bank, approving loans and once he started granting a huge amount of microloans to small businesses, everything went really well.
(I'm not really sure where Obama said those quotes and I don't want to take them out of context)
I think banks should be careful if they increase their lending to small businesses (or lending in general), because if they do it too leniently then it could cause problems. Maybe a little government regulation is needed, but maybe it doesn't even need to be GOVERNMENT regulation. The managers should just make sure that the bank isn't giving too much. Lending a little bit will stimulate the economy and help the small businesses; this is a simple solution within itself.
I also think that banks should be weary about lending more to small businesses. What would happen if those small businesses themselves were to go bankrupt. That would mean a lot of bad juju for the banks and the people to have savings in that bank.
increased lending might help stimulate the economy, but we also have to remember that lending to unqualified people and businesses is what got banks into this big mess anyway. so, though i do think banks ought to make the effort to help small businesses, it is not in anyones best interest for them to start handing out loans like they did before.
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