White House to banks, “Stop hoarding money” or else?

October 28, 2008 by · Leave a Comment
Filed under: Opinion 

Well if this is not a silent threat then I don’t know what is.  Here is what our wonderful White House Press secretary, Dana Perino had to say.  “It is in a strengthened institution’s best financial interest to increase lending once it has received government funding.”  

What could she mean by this statement, “best financial interest”?  Does this mean they could go the way of Lehman Brothers or AIG?  These are quite strong words in a supposed free-enterprise economy.   I think they need to be called out on this statement.  What’s next, Vinny the leg breaker showing up at the banks to get the credit flowing?  What are your thoughts?

News Piece:

 An impatient White House served notice Tuesday on banks and other financial companies receiving billions of dollars in federal help to quit hoarding the money and start making more loans.

“What we’re trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money,” White House press secretary Dana Perino said.

Though there are limits on how much Washington can pressure banks, she noted that banks are regulated by the federal government.

 

“They will be watching very closely, and they’re working with the banks,” she said.

Anthony Ryan, Treasury’s acting undersecretary for domestic finance, made the same point in a speech in New York before financial executives.

“As these banks and institutions are reinforced and supported with taxpayer funds, they must meet their responsibility to lend, and support the American people and the U.S. economy,” Ryan told the annual meeting of the Securities Industry and Financial Markets Association. “It is in a strengthened institution’s best financial interest to increase lending once it has received government funding.”

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