Obama's Influence on Bank Lending Is in Doubt

"If, in the alternative, they make loans to people and businesses not likely to repay them we will have, in effect, created a banking system run by the government … not a desirable outcome," he said.

Obama also can't set numeric goals for banks -- for instance, saying they should increase lending by a certain percentage year over year -- because it's difficult to determine what such goals should be, said Mark A. Calabria, the director of Financial Regulation Studies at the libertarian Cato Institute.

Calabria argues it's unclear what's had a greater impact on the decline of lending to small business -- banks tightening credit or businesses themselves pulling back on their borrowing. Uncertainty over taxes, environmental regulations and health care costs in Washington, D.C., he said, are keeping businesses on the sidelines with respect to hiring and investing.

VIDEO: The Bottom Line

"There's a degree to which businessmen are looking for things to shake out," he said. "At least when they know the rules of the game, they can plan accordingly."

What Obama Could Do

If the president really wanted to exert pressure on the banks, said Barry Ritholtz, the author of this year's "Bailout Nation," he would fight for the reinstatement of the Glass-Steagal act -- the law that once barred deposit-holding banks from behaving as investment banks -- and the mark-to-market accounting rule, which forces banks to immediately write down poorly-performing assets on their books.

Obama could also cap the size of U.S. banks, he said, requiring that no one bank contain any more than a certain percentage of the country's deposits.

Taxing Bonuses?

But Ritholtz doesn't see that happening.

"We could get really tough with them if we find the political will," he said. "Right now, everyone seems much more interested in populist ranting and demagoguery as opposed to doing something substantial."

Peter Morici, a business professor at the University of Maryland School and the former chief economist at the U.S. International Trade Commission, believes the U.S. should look abroad for inspiration on how to bring the banks in line, particularly when it comes to executive compensation. In the United Kingdom, he noted, a tax is being levied on bank bonuses.

Here in the U.S., he said, government officials "should have told (bankers) not to pay the bonuses or face really stiff taxes."

But Morici said the president's previous approach to banks likely means that Obama won't be taking such a step.

"You're known by your deeds," he said, and the administration, he said, has already "let the banks walk away with $140 billion in bonuses that are built on $240 billion in profits."

Reinhart said that bankers, in their efforts to maintain good relations in Washington amid an overhaul of banking regulations, will try to show the White House that they are increasing lending.

But he said it's unclear whether banks will actually do anything different than what they actually planned on doing in the first place. The banks could easily make it appear as if they are responding to administration demands without changing their original plans.

"You roll in the loans you were going to make anyway; you say they were in response to the administration's initiative. Maybe you gussy up the loan programs you already have on your books," he said. "Maybe at the margin, you do make more loans to some areas, but that probably means you cut back loans elsewhere."

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