Just when you thought the U.S. banking system had regained its footing, the reality is that a carefully woven federal-government PR campaign may actually be masking the next phase of the worst financial crisis since the Great Depression.
Indeed, it’s what’s just out of sight that has some analysts and economists scared to death.
To rebuild public confidence in America’s ailing banks the government has greased the system’s liquidity wheels, directly injected capital, backstopped and guaranteed loan facilities, lowered banks’ cost of funds, changed accounting rules to make balance sheets look better, bestowed passing grades on high profile stress tests and then allowed the propped-up (but still not healthy) banks to pay back government loans.
Analysts and economists question whether this race to instill confidence will outpace rising unemployment and lagging economic data, or will trigger the next phase of the global financial crisis if shaky banks end up snapping borrower lifelines.
Inside Wall Street: Government Bets On Positive Spin To Save Failing Banks | Daily Markets
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_a.png?x-id=7b913543-03d8-4acb-a674-a89724116da3)
