In trying to water down proposed rules that would force lenders to hold more capital, banks have deployed a powerful argument: Such requirements would cause them to curtail lending, jeopardizing the fragile global economic recovery. But at least three recent studies cast doubt on that assertion, which is regarded as virtual gospel within the banking industry. This countervailing research suggests that requiring banks to hold thicker capital cushions is unlikely to have a major effect on the availability or price of loans, especially if those rules are phased in over a few years.
New research says more capital holdings may not affect lending
Most Popular Articles
Latest Articles
Why are existing home prices rising when sales are still so low?
Existing home sales fell in today’s report, but home prices are still up year over year, even with higher inventory and higher mortgage rates.