Monday, April 20, 2009
Banks Hoarding Bailout Money, Won't Even Loan to Themselves
Banks across America are hording money given them (okay, loaned to them--theoretically) by the U.S. Government. The the bailout money was meant to free up stalled credit markets, i.e., give banks money to lend to businesses and consumers. The idea is to reinvigorate the economy with a little spending. But we have just learned (again) banks who got bailout money loaned less money in March than they did in February! A Wall Street Journal investigation found that the more money banks got, the less they lent.
Though not a bailed out bank, and having told me late last year for a story I wrote in the Business Journal that they have money to lend and are lending it, I posted this Union Bank of California image because of an interesting anecdotal connection to the tight-credit angle of this post: Union Bank of Calif. has had a new branch under construction on Santa Monica Blvd. in West Hollywood for almost two years now. Progress on construction has been slow to say the least. Even banks borrow money to build. Has UBOC found credit markets too tight to get on with opening the much-anticipated (the nearest location now is in the heart of Beverly Hills' worst traffic area) branch in WeHo? Stay tuned...I'll learn and let you know Wed., April 22 what's the delay.