Flycat,
Either you have missed my point, or you do not understand how banks manage their balance sheets (after 35 years banking experience I have a fair idea).
In simplistic terms, if a bank lends a CNP $1 bio then they are required to have about 8% of capital to support that loan. Meaning they need "only" about $80 mio of capital to support the loan.
If, on the other hand they purchase real estate to the value of $1 bio, then $1 bio of capital is tied up.
In other words their income generation on capital in multiplied by a factor of about 12 via lending.
This is one of the reason all banks sold of their bank branches several years ago - to release funds for lending purposes.
Flycat,Either you have missed my point, or you do not understand...
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