Paulson Lacks Leverage to Compel Banks to Put New Cash to Work

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	Paulson Lacks Leverage to Compel Banks to Put New Cash to Work

Kelika

10-15-2008 11:33 AM

142 views

tags:

economy, banks, lending

Kelika says:

The arrogance continues....

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/80a7b464-792d-410f-823c-5fdb90d336dc/EEC1C3A4-BE6F-44E2-A052-A9195EB636E3/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.bloomberg.com/apps/news?pid=20601103&sid=amZ3uCIUB8GQ&refer=news" href="http://www.bloomberg.com/apps/news?pid=20601103&sid=amZ3uCIUB8GQ&refer=news" style="font-size: 11px;">www.bloomberg.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601103&sid=amZ3uCIUB8GQ&refer=news"><P>     Oct. 15 (Bloomberg) -- Treasury Secretary <A href="http://search.bloomberg.com/search?q=Henry+Paulson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1" linkindex="48" set="yes">Henry Paulson</A>
persuaded nine major U.S. banks to accept $125 billion in
government investment. Getting them to lend it out may prove a
tougher sell.     </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601103&sid=amZ3uCIUB8GQ&refer=news"><P>The equity stakes the government is purchasing in Citigroup
Inc., Morgan Stanley and seven other big institutions come with
no guarantee that the investments will spur lending and unfreeze
credit markets. Nor do they give the government board seats or
any other leverage to demand that that the firms actually use
the money to help the economy.     </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601103&sid=amZ3uCIUB8GQ&refer=news">Treasury officials acknowledge they can't force banks to
get the taxpayer money into the hands of their customers.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601103&sid=amZ3uCIUB8GQ&refer=news"><P>The government is providing banks with ``quite a war chest
that they were not expecting,'' Ryan said. ``They need to put it
to work. The only way you put it to work is to lend.''     </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601103&sid=amZ3uCIUB8GQ&refer=news">``What you'll see most large institutions saying is, `We
will certainly listen to the government but our decisions are
what's in the best interest of our shareholders</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/EEC1C3A4-BE6F-44E2-A052-A9195EB636E3/blog/" title="blog or email this clip"><img src="http://content8.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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