Exact(8)
As Geithner said, you can't lend into a run.
"Some companies borrow from the state banks and then lend into the underground market.
"If we were able to lend into the economy, it could have a substantial impact".
Another was to lend into the teeth of a panic — though only to solvent institutions and on sound collateral.
Q.How do you square the circle of asking banks to hold more capital, and at the same time ensure that they lend into a recession?
His deputy, Anne Krueger, was more discouraging, saying, "We are not going to be able to lend into a situation where they continue having the same difficulties".
And the Fed did lend into continuing runs at both Bear Stearns and A.I.G., although officials argued then that those companies had adequate collateral to guarantee repayment.
The loans appeared to have headed off a funding crunch that could have caused some banks to fail and many others to run short of money to lend into the euro zone economy.
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