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But this issue is increasingly academic: most banks in Cyprus have stopped issuing loans altogether.
But that's where the British government will start issuing loans and guarantees.
Having a financial sector isn't bad, and issuing loans isn't bad.
While Wall Street giants were still issuing loans before the 2008 mortgage crisis, Mr. Beal sat on the sideline.
They reckon Deutsche has started buying riskier investments (or issuing loans to riskier counterparties, such as property developers) to pep up profits.
The F.H.A. referred the problems it spotted with MortgageIT to the Justice Department because it could not bring its own action once the company stopped issuing loans.
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The torrent of defaults that accompanied the housing bust led the FHA to tighten its guidelines for issuing loan insurance.
The F.H.A. does not issue loans but instead offers private lenders guarantees against homeowner default.
But the E.C.B. cannot compel those banks to issue loans to businesses, which would fuel expansion.
Securitization improves liquidity in capital markets by allowing originators to remove issued loans from its balance sheet and use the proceeds for other purposes.
Generally, private sector practices would predict considerably less revenue for loans than the government predicts when it issues loans.
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