What a crazy idea. Who would ever think of attaching strings to billions? In this case, nobody wants to add to the problems of banks by forcing bad loans but so far there is ample evidence in the US (and UK) that the banks are gladly accepting the billions but not extending loans which was the purpose of the bailout. Too bad the new US Treasury team looks like the outgoing Treasury team so hopefully Congress is awake.
Britain's treasury chief says British banks can only expect to receive funds in a second round of bailouts if they pledge to pass the money on to borrowers.
Prime Minister Gordon Brown has said he will on Monday annouce new measures to help Britain's ailing banks survive the credit crunch after a massive bailout in October failed to jump-start lending.
Treasury chief Alistair Darling told Sky News television on Sunday that banks would only have access to extra cash if they "enter into binding agreements to make sure that ... it goes to the people and businesses it is designed to support."
Darling said he was trying to deal with "blockages in the system" that continue to paralyze lending despite massive infusions of capital over the past six months.
