[JasonC]

Why would they lend? Half their capital was just blown away and loans are losing billions. The market is punishing them to the tune of hundreds of billions for not being adequately capitalized. Ergo, their own priority is to get adequately capitalized anyway they can. They do that by running off their loan books to force a cash flow in their own direction.

They aren't going to lend more until it pays to do so. You can't be against bankers making a buck and demand they lend. They only do the second in order to do the first, and only if it does. "But I'm in favor of bankers making a buck". Ok, then people have to actually pay them back instead of welshing and walking. And if they won't in their capacity as borrowers, they will in their capacity as taxpayers.

Capital is paid for in full or it evaporates completely.

[GerardKempf]

banks make money off of
a) Deposit interest - which include retail and commercial deposits (typically required of those who they also lend to)
b) Loan interest
c) Fee income - overdrafts, checks, etc
d) Ancillary product sales/commissions like insurance, annuities, securities, etc.
e) Investment income/portfolio returns

Without customers they get no a, b, c or d and hence little e
A bank’s business model is built on lending.

[CRBDeuce]

And if they won't in their capacity as borrowers, they will in their capacity as taxpayers.

Great Line!!! Methinks that Hitler saw it that way too!(thought just crossed mind...no aspersions cast!) Simply, a great line. In the good old days banks never lost money! May be awhile before we get back to 'the good old days', won't it! oh, and Gerard, the list of fees is much longer than yours! The old First Union had the epitome of fees lists! Prolly what drove Wacovia out of business in the end! (full disclosure...don't own any bank stocks, but sometimes dabble for short periods in XLF).