Geithner Bets U.S. Can Avoid Japan Trap Through Bank Earnings

The banks are not lending because there are few good qualifying loan opportunities at rates that people want to pay. In part because underlying assets prices are still not stable and in many cases still unrealistic. How do you take assets like that as security, and at a rate that customers will pay?

Banks will earn the money but they will remain risk averse until prices stabilize and at these spreads they don't need to take much risk at all to make big profits. Making banks liquid (they already are with this government backing) is the easy part.
 
banks won't lend because they need the money to cover their own debt. They can't afford to widen their risk,it has already pushed em to bankruptcy. Remember banks are stingy to begin with,in good times.
 
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