TUESDAY DECEMBER 15, 2009

"Fat Cat" Bankers

According to yesterday's Presidential diatribe, the high unemployment rate is being caused by "Fat Cat" bankers who are curtailing economic growth by refusing to provide credit to small businesses.  Apparently, the only thing between here and full employment is the opening of the easy money lending spigot.  But wait, I am confused.  Didn't the the Fat Cats cause the economic crisis by abandoning proper credit underwriting standards to generate "obscene" profits and bonuses?  What is evil, easy credit or stingy credit?  I guess in Washington it can be both.

Of  course, the decline in lending to small business could not be because the demand for loans by small business is down.  Maybe the small business owner thinks that leveraging up his business in tough economic times is a risky endeavor?  Maybe the small business is not quite as credit worthy today as it was before the economic downturn?  Or maybe, the threat of higher income taxes, higher health insurance premiums/fines, higher energy costs and greater regulation has dampened the expansion plans of small business, reducing the need for credit?  Naah, can't be.  It is just easier to blame the Fat Cats.     

POSTED AT 1899-12-30 10:20:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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