President Forcing Banks to Lend
Facing signs of a recession, Argentina's President Cristina Fernandez is ordering banks to lend $3.3 billion of their clients' savings at rates below what many believe to be the level of inflation, Bloomberg Businessweek reports. The requirements take effect Thursday, limiting interest on the loans to 15% a year.
The government says inflation is below 10%, but many analysts estimate it at around 25 percent. President Fernandez says the government saved the private banks when they were in trouble, and now it's the banks turn to do their part for Argentina by lending 5% of their deposits to small and medium-sized businesses.
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