WASHINGTON – Responding to widespread concern that there is not enough capital available to businesses, the three agencies that regulate banks today urged all banks to expedite their lending.
"If underwriting standards tighten excessively or banking organizations retreat from making sound credit decisions, the current market conditions may be exacerbated, leading to slower growth and potential damage to the economy," according to a statement issued by the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
The agencies noted that recent infusions of capital into the banks through stock purchases by the government (which so far have totaled about $250 billion) were designed to encourage banks to lend more money so as to "strengthen the capital foundation of the nation's financial system."
Recommended For You
They also urged banks to work with customers to avoid "preventable foreclosures" and to adopt "systematic, proactive and streamlined mortgage loan modification programs."
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
