Comments on: Can government get banks lending? http://blogs.reuters.com/felix-salmon/2010/03/01/can-government-get-banks-lending/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: loph4t http://blogs.reuters.com/felix-salmon/2010/03/01/can-government-get-banks-lending/comment-page-1/#comment-12368 Wed, 03 Mar 2010 01:53:59 +0000 http://blogs.reuters.com/felix-salmon/?p=2751#comment-12368 http://www.interfluidity.com/v2/167.html – “How? Simple: Rather than paying interest on reserves, the Fed can tax them… I laugh in the maw of your liquidity trap.”

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By: charlesv http://blogs.reuters.com/felix-salmon/2010/03/01/can-government-get-banks-lending/comment-page-1/#comment-12345 Tue, 02 Mar 2010 16:31:24 +0000 http://blogs.reuters.com/felix-salmon/?p=2751#comment-12345 I find it interesting that the government demands that major banks be risk-averse and heavily capitalized, while expecting them to take on more risk by issuing substantial loans to spur a recovery. It would seem that in good times banks should be risk-averse (would lower the chances of asset bubbles) and in bad times a little less risk averse in their borrowing and lending activities. Counter-intuitive? Maybe.

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By: rogueecon http://blogs.reuters.com/felix-salmon/2010/03/01/can-government-get-banks-lending/comment-page-1/#comment-12323 Tue, 02 Mar 2010 01:23:09 +0000 http://blogs.reuters.com/felix-salmon/?p=2751#comment-12323 It’s all elementary actually. If a bank is long on loans but deposits short, it has alternative funding channels, so it can go ahead and make the loan.

But if it’s deposits long but loans short, there is nowhere it can go to get that creditworthy alternative (except in the government bonds market, or yes, loans guaranteed by government)

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