Magazine article American Banker

Robson Renews Call for Increased Lending; Lindsey Warns of Riots' Effect

Magazine article American Banker

Robson Renews Call for Increased Lending; Lindsey Warns of Riots' Effect

Article excerpt

Lindsey Warnes Of Riots' Effect

WASHINGTON -- After a brief respite in the government's campaign to encourage bank lending, two top officials went back on the offensive Monday, pleading a case for consumer, small-business, and inner-city barrowers.

In a New Hampshire speech, Treasury Deputy Secretary John Robson chided in industry for investing in government securities instead of making consumer and business loans.

"In my mind, that is not banking," he said, adding that despite some encouraging signs, the credit crunch is not totally defeated.

Meanwhile, speaking in California, Federal Reserve Governor Lawrence B. Lindsey warned that bankers could be in for a new wave of government mandated lending rules unless they make extraordinary efforts to reach out to minority communities.

His comments were clearly linked to the recent racial disturbances in Los Angeles and

The remarks of both Mr Robson and Mr Lindsey can be seen as a renewal of pleas by Washington Officials, who for more than a year have called for additional lending to stimulate the economy.

Less Rhetoric in Air

In recent weeks, as evidence accumulated to suggest that a recovery is underway, the rherotic had begun to die down.

The riots in Los Angeles two weeks ago helped bring about the renewed focus on banks. With estimates of damages running close to $1 billion, banks are being pressed to contribute to the rebuilding efforts.

In a speech to the California Bankers Association in Long Beach, Mr Lindsey told bankers to brace for a fresh round of questions "about the roles your institutions have played in the past, and can play in the future, of funding economic developments of inner city areas. …

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