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As a result, he says, they have already begun to raise standards and cut back lending.
Even then, it will be an uphill battle, given the threats that banks can make to cut back lending if rules are too tough.
"The financial crisis demonstrated the long-lasting damage that can be caused when large banks become distressed and have to cut back lending to the economy.
Fears among European banks about each others' creditworthiness have caused them to cut back lending to each other, leading to calls for bank regulators to share more information about which institutions may be most vulnerable to the sovereign debt crisis.
Fears among European banks about each others' creditworthiness have caused them to cut back lending to each other, leading to calls for banking regulators to share more information about which institutions may be most vulnerable to the sovereign debt crisis.
Banks all across the country had dramatically cut back lending.
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Push too hard, and lenders might cut back on lending.
The International Monetary Fund cut off financing in September 2003, and the World Bank severely cut back on lending.
More generally, the IMF said banks should be required to raise equity, cut dividends and show restraint on remuneration rather than cut back on lending.
The firm said it had reduced its exposure to Spanish, Italian, Portuguese, Irish and Greek debt by 16 percent, to £6 billion, adding that it also had cut back on lending to companies in these struggling countries.
On top of that, he adds, the inability to securitize will constrain credit more than if banks alone had cut back on lending.
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