It’s a great time to start a bank
With the shadow banking system of hedge funds and non-bank financial institutions in shambles and the banking system’s credit shrinking, U.S. government officials are desperate to get credit into the system any way they can. A key part of that is the TALF, which is a back-door recapitalization of the shadow banking system, albeit not yet with the necessary regulatory oversight to prevent future excess leverage.
One often overlooked piece to this puzzle is fresh capital injecting into brand new lending institutions. The Wall Street Journal has a good article today demonstrating banks are still opening. (Hat tip Judith) And depositors are rushing in.