At a press conference in August, Sir Mervyn gave a clear account of the actual quantity of loans being dispatched.
The next president, Jacques de Larosière, swiftly brought in an austerity drive at the bank, while seeing that large volumes of money were lent to Central and Eastern Europe, Russia and the rest of the ex-Soviet Union.The EBRD admits that the sheer quantity of loans may have impaired their quality, an imbalance it now wants to redress.
The subprime-mortgage crisis was driven in part by a compensation structure that rewarded the quantity of loan transactions rather than the quality.
A Justice Department press release noted that, "To maximize its loan volume (and profits), Wells Fargo elected to hire temporary staff to churn out and approve an ever-increasing quantity of FHA loans... "At the same time, Wells Fargo's management applied pressure on its underwriters to approve more and more FHA loans.
The borrowers who apply to FIs for a loan but obtain either lower amount of loan than they desire or rejected are quantity rationed borrowers.
Banks are wobbly, burdened with huge quantities of bad loans.
Many big banks were burdened with huge quantities of bad loans, and bank failures climbed steeply.
When the bubble economy eventually popped, the banks were left with vast quantities of bad loans and almost worthless collateral.
For now, Draghi stopped short of announcing that the E.C.B. would mimic the action of other central banks (notably the Fed, the Bank of England, and the Bank of Japan) and start buying large quantities of government loans, a step that many economists had been calling for.
But those initiatives are qualitatively very different from the PPI stimulus - they all in effect pump mind-boggling quantities of cheap loans into the economy, or money that eventually has to be paid back, whereas PPI compensation is a handout of free, no-strings cash.
The amount of loan also varies from around USD25 for a loan with daily interest payment to USD400 for loans with weekly and monthly interest payments.
