As I have noted in my previous comment, the Obama Administration is hell bent on making sure that too-big-to-fail banks will not bring on another economic disaster. In doing so, they are strangling the economy with regulations.
They have also been overlooking a major fact.
Monetary policy has been set up merely to accommodate this “too-big-to-fail” doctrine at the expense of business who cannot access sufficient loans. Banks who have received government treatment get low interest rates and safe government bond investments to bolster earnings. Why would banks not play this spread rather than make risky loans to business? Especially with government agencies looking over their shoulder, suggesting that risky business loans are taboo?
Only government bureaucrats can think up such absurdities when rescuing banks, while supposedly attempting to get business out of a deep recession.
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