Thursday, April 21, 2011

S.S.D.D.

http://finance.fortune.cnn.com/2011/04/21/stingy-megabanks-swimming-in-cash/?hpt=T2

Maybe things could be a little different than the stagnant "recovery" that we are a part of.
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4 comments:

  1. BethApril 21, 2011 at 4:50 PM

    I think that I don't understand this article as well as I should. I'm confused about the part that talks abut outstanding loans. Are they saying that less outstanding loans is a good thing or a bad thing? In my mind, outstanding loans are bad, right? Any clarification?

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  2. Ankur JainApril 21, 2011 at 10:24 PM

    This comment has been removed by the author.

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  3. Ankur JainApril 21, 2011 at 10:25 PM

    I felt like the article was a bit misleading. The author doesn't account for loans that have been written off or paid off during the period. Loans that have been written off or matured go into the balance sheet and their loan balance stays flat. According to the author, bank hasn't loaned a penny to anyone, when they actually have in that time period.

    I find it funny how banks are trying to publicly enhance their image and trying to be responsible community members. They say that they are increasing their loans, but they are actually being "restricted" by the federal government. These are the same banks that are regulated by the federal government and are now required to raise their capital levels. It just lends to the same question of whether these banks should have been bailed out.

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  4. Chris DendrinosApril 22, 2011 at 2:10 PM

    I think its funny, first we were complaining that they were making to many loans to customers who should not have received them, now were complaining that they are being to restrictive with their capital.

    Keeping more cash on the balance sheet is a form of risk aversion certainly we cant be complaining about that now as well. Weren't we calling banks to risky... are they to conservative now?

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