Tuesday, December 15, 2009

This is Why Banks Aren't Lending

President Obama, please take note.

Low interest rates don't make it attractive to lend to small businesses. In fact, just the opposite.

Why would a bank risk their hard-earned (or TARP-borrowed) cash by lending to a small business when they can go to the Fed's discount window and borrow money at 0.25% interest and then buy U.S. Treasuries that pay a robust 4.45%?

I don't know either.

1 comment:

Anonymous said...

Sounds like a great deal to me....I'd like to borrow a few billion at those rates.
Remember if you owe the bank 5 million dollars you have a problem, if you owe the bank 5 billion dollars, the bank has a problem.