Under proposed new international rules, due to come in at the end of 2006, the amount of capital that banks will have to set aside to cover loans to other banks will depend on the borrowers' credit ratings.
And, as I have pointed out here many times, part of the vulnerability of British banks is through their loans to other eurozone banks.
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Loan modifications have been complicated by the way the banking industry has approached mortgage lending in recent years, selling their loans off to other banks that bundle and resell them as securities rather than holding all loans separately.
The European idea is to get around that lack of trust by promising banks that loans they make to other banks will now be guaranteed by the governments.
Because pieces of these loans are often resold to other banks, American banks could later participate in the loans indirectly if they change their minds.
Banks gave loans to individuals who could not afford them, then bundled those loans and sold them to other banks who were doing the same exact thing.
After including the hedges and offsetting positions that their banks have in Ireland, and allowing that loans to vehicles in Ireland may in turn be loaned to other countries, German banks' exposures to Ireland are far lower than the headline BIS figures.
It sets Bank rate, which is the percentage it charges on loans it makes to banks and other financial institutions.
The original idea was to sell both loans in pieces to investors such as hedge funds, other banks and collateralized loan obligations, special funds set up to invest in loan deals.
But the funds rate covers all loans that banks make to each other on a short-term basis.
In addition, some are simply withdrawing money from banks altogether, which is perilous for the banks because they rely on deposits to be able to fund loans, credit lines and other financial products that grease the wheels of the economy and enable banks to make money.
He also wants the postal bank to provide loans as a way to revitalise rural regions, further infuriating other Japanese banks.
Investors are increasingly risk-adverse, companies are struggling to raise the capital they need to expand, and banks are increasingly unwilling to provide mortgages and other loans to families.
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Furthermore, this exercise will certainly have an impact on other banks which extend loans to the same borrowers.
It is already selling repackaged loans to investors and will join other big German banks in securitising more.
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Is it that banks don't trust their other banks to pay the loans back or is it they don't actually have money to lend?
And, we brought more than 1, 300 lenders back to making SBA loans at a time when other banks were cutting back their small business lending.
Opponents maintained that instead of cheaper loans, the payday and other high-risk loans will no longer be available and customers will have to turn to banks and pay higher fees, or end up bouncing checks.
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The rules apply to new loans made by banks, mortgage brokers and other lenders.
Commercial Lending X has not only relieved banks of much of the loan underwriting and processing (cost-center) burden, they have also found creative ways to increase bank revenues by brokering denied loans to generate referral fees from other lending institutions, by finding participants to help larger loan transactions get done and by bringing banks new customers.
During the heat of the bubble, banks competed with each other to give loans, loosening their standards.
Some of these were responsible for the banks' bad lending practices, big loans to other newly privatised firms and frauds that all eventually landed on Fobaproa.
The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.
Other proposals, such as selling some loans back to the banks later, could delay and even diminish the cost to the taxpayer, but they might also make it harder for the banking system to recover.
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Supervisors on both sides of the Atlantic concluded that the bank's heavy reliance on wholesale markets (very short-term loans from companies and other banks) left it especially vulnerable to running out of money when confidence collapsed.
If we want to avoid future financial crises that impoverish us all, we've got to pin our hopes on the effectiveness of these new rules - which also cover the amount of cash banks have to hold against the threat of runs, the longevity of their own debts and the risks that banks attach to different kinds of loans (among other things).
In the next year the Federal Reserve System is widely expected to increase the rate banks can charge each other for loans.
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The original idea, and still the stated goal, was to free banks and other financial firms of the most noxious loans and securities on their books by purchasing them in auctions.
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One of the problems is the still-opaque process the banks use to evaluate and mark securities holdings, loans and other assets to market, a process they have to repeat daily because of new accounting rules.
The other part is the great attraction to banks of getting these loans off their balance sheet.
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