While the ability of some smaller banks to lend is restricted by the loan-to-deposit ratio regulations, sluggish credit expansion was not primarily a result of liquidityconstraints, Barclays analysts said.
Dimon expressed his concern that the litany of rules being written and the likelihood that new capital and liquidityconstraints will be more onerous for large financial institutions in the past might slow down the recovery.
While equity stock offerings were used frequently to build their businesses, the BDCs still had large amounts of debt secured by loans and equity investments in the very companies that are most susceptible to liquidityconstraints during recessions.