Big Banker: Government Needs To Quit Helping Big Banks

And let's not hear another word about how government control is somehow a move towards socialism. Tough times requires touch choices and difficult decisions. And they also require that bad behavior be curtailed and good behavior monitored. Right now the banking industry needs more government regulation and oversight. And it needs enforceable guidelines on how and under what criteria banks should make loans. To the headline writer of Joe Nocera's column on Saturday I say, "Banks don't give loans," (as the headline read) they make loans. "Give" implies that the money does not need to be repaid. And that is at the very core of this issue. We need to ensure that the banks apply reasonable lending criteria, but still criteria that encourages them to make loans to the many, many borrowers in this recession who remain credit-worthy, despite declines in revenues and profits. To do that, banks need to re-establish the old standards and verification processes that served the banking system so well for so long. And they need to once again look the borrower in the eye instead of relying on a credit scoring system that is doing far more harm than good.

If we make the bailout funds available to the community bankers, I promise they will know what to do with the money. They will lend it and they will make prudent lending decisions, based on direct and comprehensive knowledge of the borrower. So what are we waiting for?

Read more on New York Times