by Rick Lowe

Your not so humble blogger received a call from The Nassau Guardian on Monday, November 24, 2008 regarding the apparent restrictive lending policies recently implemented by the banks.

The question was something to the effect of whether or not I thought this practice is fair.

My understanding is banks have tightened the reigns on credit because of the dramatic slowdown in the economy. They are requesting larger down payments and making sure  borrowers will remain employed as best they can. So potential borrowers are being turned down or the process is extremely slow.

It is reminiscent of the late 1980's when the Japanese Yen doubled in value causing dramatic increases in the cost of cars form Japan.

I made the point that we will adjust to these more stringent terms as we did in the 1980's. The important thing is we do what we need to do to stay afloat until the economy turns around.

One point I regret not making is that banks lend money that they have on deposit from other clients so it is incumbent on them to ensure the money they lend bears as little risk as possible. In other words they have to pay depositors their money if requested and the more bad or risky loans, the more precarious the banks position becomes.

This is not the time to cast aspersions on banks and businesses. We need them around to help provide jobs in this struggling economy.