Similarly, all 50 states now have registered community credit unions at the municipal, county, and larger levels, with assets and lending reaching tens of billions of dollars.
The problem is that until banks have all the capital they need, and as I have already mentioned, all the banks will be sorely tempted to boost the ratio of their capital to assets by lending less, to shrink the denominator in the calculation.
So there is a risk that banks are concentrating too much of their assets in consumer lending.
Banks, facing capital constraints and forced to de-leverage their own holdings of troubled assets, are not lending more to each other or to customers.
It could also develop a professional and uniform approach to valuing and disposing of bad assets while leaving new lending decisions to the good banks.
"Over time, by providing a market for these assets that does not now exist, this programme will help improve assets values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets, " US Treasury Secretary Timothy Geithner wrote in the Wall Street Journal before the programme was officially announced.
That isn't the only way that management companies can rake in money by lending out your assets.
Lending on trophy assets in cities such as New York is a "prescient first step, " he said.
Because prices are rising, banks start to feel more comfortable lending to people buying danger assets.
With capital insufficient to support their assets, Japanese banks have almost stopped lending at home.
Paulson and Fed Chairman Ben Bernanke, a historian of the Depression, led the charge for the government to buy up the bad assets and, they hope, reignite lending.
To offset those losses, banks are shoring up balance sheets by cutting back on lending and dumping bonds and other assets in the markets.
The process of lending money against the security of assets, or trading assets with the banks' capital, helped to push asset prices even higher.
They are still gun-shy about borrowers with poor credit quality and weak assets, but they are very intent on lending to strong borrowers with good properties as collateral.
Banks need to keep a ratio between the value of their assets and the amount of money they're lending out and because of this mortgage crisis and because of the fears surrounding it, the value of the assets they have on their books has fallen.
Reducing the amount of foreign assets that Swiss banks hold is sensible but privileging domestic lending so flagrantly is alarming.
Bankia - which lost 3bn euros last year and expects to lose 19bn euros this year - said it would shrink itself by some 50bn euros by selling assets to Sareb, and also by cutting back on lending and by selling off investments in Spanish industry, including a 12% stake in International Airlines Group, the owner of Spanish national airline Iberia and of British Airways.
So far, only a few governments have made moves towards dealing with their toxic assets: the U.K.'s asset protection program insures banks against future losses on bad assets but in return requires pledges that participating institutions increase domestic lending.
Regaining his credibility will depend on the success of two new schemes: one to boost consumer lending by reviving securitisation, and another to remove toxic assets from banks (details of which are expected any day).
What is important is what happens to money and credit flows as the Fed allows special lending programs to expire and begins to replace other purchased assets on its balance sheet, mainly mortgage-backed securities, with traditional Treasury bills.
It has created many lending programmes since August 2007 to help banks finance holdings of illiquid assets and so avoid fire sales.
The people said Citi will wait until it sells its consumer-lending business, OneMain Financial, and sheds or runs off additional assets housed within Holdings before finalising its decision on the cards unit.
The ONS does not consider business loans to be "liquid assets" for these purposes, so any borrowing for programmes to support business lending - for example, to buy corporate bonds or packages of small business loans - would be included in Public Sector Net Debt.
Fishman remembers being pitched on creating a securities lending program that would have used the proceeds to buy mortgage-backed assets.
Philippine banks officially have only 11% of their assets in property, but it is thought that, as in Thailand, property lending has been seriously under-reported.
To make the deal even sweeter for Lone Star, Merrill is lending it money to complete the deal, using the very same toxic assets it is trying to get rid of as collateral.
By buying assets, the Fed allows American banks to shed them, freeing scarce capital for fresh lending.
The two firms are the industry leaders in the (once) lucrative business of providing hedge funds with financing, lending them shares for short-selling purposes, settling trades and housing fund assets.
ECONOMIST: Where will hedge funds put their business in future?
Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets.
Although Erste Bank inherited clean, ring-fenced assets, it took time to coax its once-bitten, twice-shy staff into lending again.
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