Billions of federal bailout dollars are flooding the financial system, credit markets are loosening and many banks say they are ready to lend. But a crucial piece needed to solve the credit crisis is still missing: borrowers.
With the economy slowing, banks are seeing a big decline in the number of people seeking loans because nervous consumers and small businesses are scaling back their borrowing.
The slide in loan demand has been a hallmark of past downturns, and it could thwart the government's attempt to increase lending with an injection of $250 billion in emergency cash. This is one problem that has nothing to do with whether a bank is healthy.
Borrowers wanted: Banks have cash but few clients
Posted by suzyQ under Raising CapitalFrom http://www.iht.com 5631 days ago
Made Hot by: on December 1, 2008 5:44 pm
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