Banks Receiving Mixed Signals From Regulators
Banks across the country are saying they’re stuck between a rock and hard place, as their regulators are sending them mixed signals. Being strongly encouraged to expand consumer lending, while informally being pushed to raise and hold extra capital has banks confused — further complicating the restoration o our financial system.
Federal Reserve Vice Chairman Donald L. Kohn addressed the “The Role of Regulators” earlier in December, when he spelled out both the increased actions by the Federal government designed to encourage lending, as well as the need for financial institutions to hold reserve capital.
