Banks hoard cash despite infusion of government money

10/23/2008 | Bloomberg Businessweek

Money from the U.S. government's bank bailout is not creating loans, partially because the government's own bank examiners may be intimidating banks into hoarding their new-found cash. Experts said field staffers think they are graded solely on whether institutions fail, a mind-set that forces banks to plow capital into reserves rather than loans.

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