More on why banks won't loan

We've discussed the big tension between banks and regulators right now: The reluctance of banks to step up their lending despite receiving billions in TARP funds. Business Week weighs in and makes clear that banks are digging in their heels a bit. "Banking chiefs defend their position. They argue that the government funds are designed to shore up capital and support lending, but that they have no obligation to make new loans."

Bank of America CEO Ken Lewis tells the magazine, "We don't write $15 billion in loans because we got $15 billion from the government." Now for some pols, these are fighting words. But we've noted the tough spot banks are in: They're being asked to make more loans quickly in the worst possible time. You can't toss your standards. It's a no-win situation in some respects.

For more:
- here's the article

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TARP news from FierceFinance