You may think of banks as just taking in your savings and loaning it out to someone else, making money by pushing money around.

But they provide a real service. A bank that has say $100 million, can loan out TEN TIMES that amount, a BILLION dollars.

That money allows pizza places, hospitals, factories to borrow and expand.

"The thing is," says Ira Jersey at Credit Suisse, "you scale that up to some of the largest firms that have filed for bankruptcy or are being taken over by the FDIC lately, you just realize there is a significant portion of the $12 trillion in bank assets that no longer is going to be out there and being used for making consumer loans or making loans to other businesses."

That's the worry.

The Washington Post has a good story today looking at who is having trouble getting loans and who isn't.

categories: Understanding The Crisis

9:09 - October 1, 2008

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