This is absolutely absurd.

Banks should be “forced” to enter into potentially foolhardy business arrangements just because they have moeny on hand ?

I can understand motivating them somehow to be perhaps less risk averse than they currently are – taking chances on new business proposals, but isn’t it assumption of unnecessary risk that put them where they are now ? If everyone had actually repaid their loans, we wouldn’t be having this conversation.

Doesn’t it stand to reason that if they are presented with a solid business proposal by a reputable potential customer that it makes good business sense to enter into a partnership ? And doesn’t the corrolary hold true as well, that they should not enter into risky transactions merely to get the money flowing again ?

Banks that sit on their cash will flounder, those that spuriously loan money to all comers regardless of merit will fail, and those that actively make loans to those with genuine prospects to repay them will flourish. It’s pretty simple, really.

To lay the current global economic crisis solely at the feet of the banking system is selling short the dangerous influences of the regulatory system (i.e., government intervention), the insurance industry, the real estate industry (incl, mortgage brokers, assesors, and the agents themselves) and purveyors of financial products outside the banking industry (e.g., brokerage firms).

Fat-cat bankers bonuses are unpalatable to most of us, but their recipients were but one leg of the wobbly stool that was the financial bubble.

The Administration is hiding behind the smokescreen of jobs that have been “saved”, because there’s no accurate way to determine whether those jobs would have actually been lost. That’s why unemployment continues to increase – because new jobs aren’t actually being created by all this spending.