Magazine article American Banker

What Top Bankers Told the President ... Credit Crunch a Misnomer for Slack Loan Demand

Magazine article American Banker

What Top Bankers Told the President ... Credit Crunch a Misnomer for Slack Loan Demand

Article excerpt

What Top Bankers Told the President

. . . Credit Crunch a Misnomer for Slack Loan Demand

Q$A For the past four weeks, the message from the White House has been loud and clear: The economy isn't rebounding fast enough, and tightfisted bankers, fearful of harsh evaluations from examiners, are the reason why.

Last Thursday, President Bush summoned a dozen industry leaders to the White House to air their views. The meeting came on the heels of an administration plan to stimulate lending through regulatory easing.

After the meeting, three bankers fielded reporters' questions in the White House driveway. Excerpted below are comments by Hugh L. McColl, chairman of NCNB Corp., Charlotte, N.C.; John Medlin, chairman of Wachovia Corp., Winston-Salem, N.C.; and Alan Tubbs, president of Maquoketa (Iowa) State Bank and of the American Bankers Association.

Press corps: What did you tell the President? Hugh L.McColl: All of us commented that we felt loan demand was very slack, that [borrowers] were nervous. It was the view of the bankers that the regulators did not have much to do with that. It was the lack of demand rather than intervention by regulators causing a problem.

PC: Will the President's credit stimulus package help? Alan Tubbs: His initiatives were certainly headed in the right direction. We want to work with him to get the message from the head examiners down to the field.

Banks need to make [high-quality] loans, and there's adequate credit available. …

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