If banks have to keep their assets and liabilities at certain percentages or be fined (or taken over), they will be less likely to lend. Say a business has a 0,000 line of credit that they only use occasionally when working capital is low. Otherwise the balance owed on the line of credit is almost always at zero. However, that 0,000 line of credit will show as a liability on the bank audits. Banks will be much less likely to give lines of credit as opposed to conventional loans, or will give smaller lines.
Our bank has significantly cut back lending to businesses and has completely canceled or lowered many business lines of credit because of this. I always hear this administration saying banks need to start lending, but does he realize that government rules are whats holding many banks back?
Holy cow Melissa, take a deep breath. These are NEW rules that you just listed. I am talking about the existing rules. Unless you own a business you would have no idea what I am talking about. Obviously you don’t so put a sock in it and copy and paste your "cliff notes" somewhere else. You are one hell of a fast keyboarder though. haha
If it hurts smaller business owners Obama is for it. The more centralized industry is the easier it is to be merged with the federal government.
You are misinformed.
I gotta tell you – this is one of the most bizarre reactions from the Reichtwingers thus far.
One would think that every single American taxpayer would be 1000% behind this idea.
And if you would shut up long enough to learn the FACTS of what Obama is proposing, even the most ardent Obama-haters would have to admit it’s a great idea.
Since all you screaming, red-faced haters seem incapable of reading an entire news article, let me "Cliff note" it for you:
1) It is a FEE, not a TAX. Is your bank TAXING you every time you get your statement every month and you’re paying those fees?
2) The fee will be based on a portion of the banks’ liabilities (outstanding balance owed to the American taxpayers. If they PAY what they BORROWED, they will not be charge a fee
3) This only applies to the LARGER banks. The smaller, "hometown" local banks did not BORROW money from the American taxpayer and will therefore not be subjected to any fees. This means that smaller, local banks will be COMPETING WITH the larger banks, SO THE BANKS WILL NOT BE CHARGING THEIR CUSTOMERS ADDITIONAL FEES or their customers will be leaving in droves.
It’s called CAPITALISM. Forcing banks to COMPETE. It’s a great idea.
4) The brilliance behind this "FEE" is that the banks can MORE than pay these fees by simply shaving a lttle off the tops of the MULTI-MILLION-DOLLAR CEO BONUSES that the banks are insisting on giving out. WITH OUR MONEY.
Don’t you guys get it?
Obama is trying to tell the bankers that it is not "business as usual" and that we don’t want our taxdollars going out for multi-million-dollar CEO bonuses when the CEOs didn’t do their jobs in the first place.
Any person in this country who actually took five minutes to understand the plan – INSTEAD OF JUMPING ON THE "BASH OBAMA BANDWAGON" – would appreciate the brilliance of charging Big Banks a FEE for keeping our money to give to people who are already millionaires.
Banks ALREADY have to keep their assets and liabilities at certain levels or they will be fined. It’s been that way since 1934.
Yes that will make them less likely to lend–of course, that’s the goal! The whole idea is to make sure banks have capital reserves so that a run on the bank won’t cause the bank to go under!
If a bank lends out 99.9% of its deposits, what happens when the depositors ask for 0.2% of their deposits back? You guessed it–collapse. That’s the whole point of banking rules; the fact that banks lent out so much of their money is part of what caused this whole crisis in the first place.
Because he doesn’t care about other businesses. He just wants to do whatever the hell he wants to do and not see the realistic consequences that follow his decisions.
We WANT banks to be less likely to lend. You do realize that unrestricted lending is what caused this whole problem in the first place don’t you?
He can see it, He just doesn’t care. He hates business as much as he hates America
He sees it.
Read DREAMS FROM MY FATHER. He outlines the problem with the private sector…
He knows exactly what he is doing.
He knows, he just doesn’t care..
Wow another uneducated republican
deregulation rarely works even your libertarian Laissez-faire capitalist Alan Greenspan said so
http://www.youtube.com/watch?v=bAH-o7oEiyY&feature=related
Because it is Republican propaganda instead of the truth.
The Canadian banking system is considered the strongest in the world, even ahead of Switzerland’s.
Why? Because they both do what Obama is proposing to do with ours: keeping at least 10% (8% in our case) of liquid assets per line of credit open.
It makes total sense. Only someone with no clue about economics would oppose that, at this point.
you are correct for the most part. It’s a TAX not a FEE.
Trust me…he knows.
Large banks, by virtue of their investment choices, impose very real costs on the economy as a whole, just like industrial companies that pollute the environment. Naturally, they should bear some cost to reflect the economic externalities their operations create.