WASHINGTON – Responding to widespread concern that there is not enough capital available to businesses, the three agencies that regulate banks today urged all banks to expedite their lending.
"If underwriting standards tighten excessively or banking organizations retreat from making sound credit decisions, the current market conditions may be exacerbated, leading to slower growth and potential damage to the economy," according to a statement issued by the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
The agencies noted that recent infusions of capital into the banks through stock purchases by the government (which so far have totaled about $250 billion) were designed to encourage banks to lend more money so as to "strengthen the capital foundation of the nation's financial system."
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