Monday, March 29, 2010

Commissioner to banks: Loan more money

Posted By on Mon, Mar 29, 2010 at 11:21 AM

If you've been paying attention to UNC Charlotte's economic guru, John Connaughton, you'll know that he's concerned about the vast amounts of cash banks are hoarding instead of lending. That's a problem.

When banks don't lend money, businesses can't expand, they can't hire people, those people can't spend money. It's a bad, bad cycle to get stuck in. It's a cycle we seem to be in currently.

It's also quite ironic, since we-the-taxpayers loaned the banks billions to pull their sorry assess out of a serious death spiral not that long ago.

But, now, the North Carolina bank commissioner is weighing in:

N.C. Banking Commissioner Joe Smith says banks must increase their lending to small businesses and help restructure the mortgage industry to help the economic recovery.

“These are tall orders but necessary for the good of the industry and the nation,” Smith said in an address to the Banking Institute in Charlotte, a gathering of industry leaders and regulators. “All stakeholders, including regulators, need to rethink their roles and focus on the big picture.”

Smith oversees 97 state-chartered banks and all mortgage lenders doing business in the state.

Read the rest of this Business Journal article, by Lee Weisbecker, here.

Catch up with Connaughton's forecasts, and sign up for a reminder about the next one, here.

A report about money hording, from November 2009:

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