Wednesday, June 15, 2011

Watch the propaganda war

The USA's Federal Deposit Insurance Corp has decided to hold big banks to the same minimum capital standards that community banks must meet. Surprise!!!

So the big banks have launched a propaganda salvo, arguing that the new capital standards will hinder lending and put them at a competitive disadvantage.

Putting big banks on the same footing as community banks creates for the big banks a competitive disadvantage? Who are they trying to fool?

And the availability of all the capital that they have had since the government decided to support the big banks does not seem to have enabled them to lend any astonishingly great amount so far.

"We're for higher capital standards, but we want to ensure that the banks have the ability to make loans," Scott Talbott, senior vice president of government affairs at The Financial Services Roundtable is reported to have said. But why should anyone believe that putting big banks on an equal footing with community banks for capital requirements is going to make the blindest bit of difference to the lending activities of big banks? Sphere: Related Content

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