Banks Are Stronger, But Mortgage Demand Is Weak

I was not a big fan of the President Bush’s $700 billion plan to bail out Wall Street and the banks but virtually all of this money has been repaid to the U.S. Treasury so on balance, the move probably kept the economy from falling off the cliff. On the down side, it made it easier for President Obama to launch his trillion dollars stimulus. People became inured to these huge sums.

Banks have recovered from the disaster of 2008 but their stocks remain near historic lows.

Ben Bernanke, a conservative capitalist, tends to get rave reviews from liberals and criticism from conservatives.

We learned that Texas governor Rick Perry was not ready for prime time when he went after Ben Bernanke during his first day on the campaign trail for the Republican nomination for president.

The Los Angeles Times reports:

WASHINGTON — American banks have made significant strides in boosting their financial health since the recession, but the same cannot be said of their lending activity, especially for home mortgages, Federal Reserve Chairman Ben S. Bernanke said.

In a speech Thursday, the Fed chairman gave America’s banking system a generally clean bill of health, citing stronger capital and leverage ratios, better credit quality and improvements in a number of “key systemic risk measures.”

“Overall, they present a picture of a banking system that has become healthier and more resilient,” he said in prepared remarks delivered by satellite to a conference in Chicago.

So why aren’t banks making more loans?

Apart from “navigating an economic recovery that has been halting at times,” Bernanke said, banks have imposed tighter lending policies while demand for loans has been weak and credit quality of potential borrowers remains impaired.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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