Besides being to big to fail these banks were too big to not profit and too big not to accumulate that profit into new equity to stabilize them. This was no surprise and it is no surprise that they are holding more reserves and not lending much..they need to hold a lot of profitable govt bonds to regain their capital position. Plus..they need about 60% of the market in lending and credit cards to make enough money to be profitable. A new monster of a banking system has been created. Fannie and Freddie need to buy and guarantee their mortgages.
...This was no surprise and it is no surprise that they are holding more reserves and not lending much..they need to hold a lot of profitable govt bonds to regain their capital position. Plus..they need about 60% of the market in lending and credit cards to make enough money to be profitable...”
That makes sense to me. I know the Obama and the left are upset that the bailouts did not produce more bad loans. There is no way corporations should be paying large bonuses to losers who just got bailed out by my tax dollars, though. The performance incentive system is as warped as are the loan qualifications.