Stephen Lebaton on banks which want to pay the bailout back

March 11, 2009 11:33 am

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The banks are advocates of Government controlled low interest rates of the money provided to them, they are equally aggressive partisans of “free market” when setting the interest for their borrowers. Mr. Bernanke tried to explain the recession by the “glut” of money coming from China. The “glut” from Uncle Sam is even better. No wonder some banks are sufficiently profitable to avoid bailout and associated controls.

The Administration should take a hard look at both sides of bank money equation. Some steps are fairly easy. Take mortgages; almost everybody with simple skills, little money and patience can reduce the interest rate of his or her loan by refinancing it. The Congress and the President can make refinancing a law of the country. The interest rate of every consumer mortgage would be reduced immediately to say prime plus 3, without any need to apply for it. This will automatically reduce the number of foreclosures. Everybody, with possible exception of loan brokers, should be happy, even the banks …

— Aharon Meytahl, Vestal, New York