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Banks and other lenders are engaged in an increasingly pitched fight for some corporate...

Banks and other lenders are engaged in an increasingly pitched fight for some corporate borrowers, raising concerns that the banks are not charging enough to cover the risk they are taking on. They're "climbing over each other" to increase loan volumes, says a ratings firm exec, worrying that banks are relaxing their lending standards to make more loans.
Comments (5)
  • montanamark
    , contributor
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    meanwhile they continue to abuse and neglect consumers. they get zero % fed money and lend it to consumers at 15%+ while hoarding cash to pay a few monster bonuses and to play the ponzi market.
    the big banks are truly evil
    21 Jun 2011, 10:46 AM Reply Like
  • 7footMoose
    , contributor
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    This story could have been written any time during the last 30 years. There are too many banks competing for too few good loans and as a result all banks are making some underpriced, poorly underwritten high risk loans that should not be made. This is the formula that set off the last and still going on economic melt down.
    21 Jun 2011, 11:01 AM Reply Like
  • Tack
    , contributor
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    Oh, please. The banks, between myriad new restrictions, fear and risk-free returns from the Government are hardly taking on any risk at all. That's one of the fundamental reasons why there's no significant private-sector growth.

     

    If they're fighting over some small wedge of total loan volume, it's only because they perceive, rightfully or wrongfully, that slice to be relatively risk free, too.
    21 Jun 2011, 11:24 AM Reply Like
  • kmi
    , contributor
    Comments (3967) | Send Message
     
    The banks have allocated capital to lending and do not want to lend to consumers, so the only clients left are corps. They also want to prove to the administration that they are not withholding loans, so they want to be able to say 'we have made $xxxxxxxx in loans this quarter' without revealing it was to 3 corps as opposed to a thousand consumers.

     

    I've bought and sold real estate since 2007 and I continue to find the lending environment from traditional lenders troublesome. In the US the difficulty in my opinion arises from the fact that they securitize the loans.
    21 Jun 2011, 02:25 PM Reply Like
  • Rob Viglione
    , contributor
    Comments (331) | Send Message
     
    The entire banking system has been under-capitalized for the risks it has assumed, principally as a consequence of federal support. Taxpayers should not be used as a crutch to let reckless banks gamble on.
    21 Jun 2011, 11:04 PM Reply Like
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