As Banks Exit TARP, Obama Seeks New Ways to Boost Credit
December 16, 2009, BusinessWeek

Now that the nation’s largest banks are financially strong enough to return their federal bailout funds, the White House is putting new pressure on them to increase lending to companies and individuals.

Even as they do so, regulators are also encouraging more prudent banking standards. The post-TARP capital levels may become the new norm for big banks, says Ernie Patrikis, a former Federal Reserve Bank of New York general counsel who's now a partner at law firm White & Case in New York.

As capital rises, lending is falling. Indeed, bank lending to businesses declined 17 percent, to $1.35 trillion over the past year, according to the Federal Reserve. "These guys are in it to make money," says White & Case's Patrikis. "Who wants to be the first banker to make a bad loan?"