Banks are piling up reserves in case of another regulatory disaster.
The coming correction in the stock market will do nothing to assuage these fears.
Not even good earnings reports will be believed, since the general mood is so pessimistic.
Money market arbitrage looks better and better every day.
* * * * * J B K * * * * *
San Francisco
But small business owners tell a different story. They say that tighter lending standards leave too many viable businesses unable to access the credit they need to grow or finance routine operations like buying materials to fulfill customer orders. Lending standards have been growing steadily more restrictive for nearly three years, according to the Federal Reserve's most recent Senior Loan Officer Study, released in October.
Edward Yingling, CEO of the American Bankers Association, says that finding the right balance between caution and investment is critical to spurring economic recovery.
http://money.cnn.com/2010/01/18/smallbusiness/small_business_lending_drop/index.htm
