I was wondering how Paulson throwing money at banks would unfreeze the credit market. Looks like the answer is whine until bankers can’t stand it anymore. Ridiculous. What’s next? Accuse banks of being anti-American unless they lend?
IMHO, it makes more sense to measure each bank’s lending practice and adjust central bank lending rate for the bank. In essence, it’s a measure of how much leverage a bank offers over US economy. I think it’s reasonable that banks that offer the government more control over US economy should get lower lending rate over those who offer less.
To banks, this change would just introduce a new business factor to consider instead of the political and bureaucratic mess being thrown at them now. Banks know how to deal with business problems, not the other.