3. In normal times, it would have loosened up credit
The problem is that banks don't want to risks lending the money, and would rather hold onto the capital to protect against possible losses. They don't want to be the next bank to go under.
The Fed is trying to do whatever it can to get the credit flowing to stop the downward spiral in the banks. Many of the actions they are taking are unprecedented, like assuming some of the risks of the banks.
You're drowning..and there are sharks circling..and a boat comes alongside...a guy leans over the side, reaches out for you...there's something in his hand... He's offering to sell you a new swimsuit..for 50% off:)
Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators
Important Notices: By participating on this discussion
board, visitors agree to abide by the rules outlined on our Rules
page. Messages posted on the Democratic Underground Discussion Forums are the
opinions of the individuals who post them, and do not necessarily represent
the opinions of Democratic Underground, LLC.