Banks are conserving cash in a way they had not done in past, prosperity years. That is because banks are not making as many loans as they can. And it is hurting industry.
They find he demand is lower during a deep recession, but they are also gun-shy. They are afraid of taking on undue risk in a shaky economy.
As I have often mentioned, this is an indication of the failure of the Obama Administration to properly repair the banking system. They have made funds available to banks at practically no cost, whereby banks can produce enormous earnings by investing in U.S. bonds, instead of industry loans.
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