Thursday, February 18, 2010

Let me see if I've got this straight

I've been hearing for a long time now that banks aren't lending any money. They got all the bailout money and used it to to buy good (versus the bad that they had) assets.

So today, the Federal Reserve raised the discount rate, the rate it charges banks - the folks that aren't loaning any money.

Yeah, I'm sure I'm stupid, I'm sure I'm missing something.

Banks aren't lending, so to get them to lend, increase the rate they pay for the money they lend out, except they aren't lending it.

Feel free to leave any wisdom on the issue that you may have in the comments.

1 comment:

Debo Blue (banker) said...

I work for a bank. I'm biased. No comment.