November 19, 2008

Normal Level of Lending?

A quote from a Bloomberg article about the ongoing discussions in the US Congress:
Federal Reserve Chairman Ben S. Bernanke told lawmakers at the hearing that using the TARP for buying stakes in banks is ``critical for restoring confidence and promoting the return of credit markets to more normal functioning.'' He warned that lending in the U.S. is ``still far from normal.''
Quite true, Chairman Bernanke. Lending is far from normal in the US. It has only just started to come down to normal levels after 30 years of excess.

An honest analysis would discuss ways of slowing down the return to norm. Even more important would be measures that would help people and businesses to adjust to smaller levels of lending and debt.

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