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Northwest Voices

Seattle Times letters to the editor

October 25, 2008 at 6:22 PM

$7 billion bailout

Regulate, please

When U.S. Treasury Secretary Henry Paulson recently loaned money to banks, they were not required to do anything with it.

Unlike the British, Paulson did not require banks to ease the credit freeze by loaning the money to other banks, to businesses or individuals. Consequently, the banks have no incentive to do anything with the Treasury loans, and I expect the banks simply to add these loans to their existing hoards of cash, without loaning any of it.

Some independent economists say that the current credit freeze stems more from continuing losses in the mortgage market than from defaults on new loans. Consequently, shouldn’t the banks receiving these loans be compelled to ease the mortgage crisis by immediately imposing a moratorium on foreclosures and allowing mortgage holders faced with foreclosure to renegotiate the terms of their mortgages?

— Roger Chapanis, Sammamish

Comments | More in Wall Street bailout

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