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I was very clear in warning about the "everyman for himself" phenomenon back when the first US bailout package was announced in the US. All of the money given banks are going straight to the bank's coffers and nowhere else. It is a farce  to believe that banks will act against their own self interest when given money. PNC took the money and bought a bank with a risky loan portfolio to boost deposits, AIG is paying margin calls with its taxpayer money, JP Morgan and Merrill chiefs flat out said, "No, I will not lend the new money out", and the Euro banks are also designing special textual diagrams to display their views on handling the new low interest rates they are benifititing from by way of the UK government. See what I just pulled off of the memorandum of understanding between HSBC and the government:

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  HSBC Defies Brown, Signals It Won't Pass On All of Rate Cuts to Customers

From Bloomberg:

HSBC Holdings Plc defied a call from U.K. Prime Minister Gordon Brown to revive lending, signaling it probably won't pass on to consumers and businesses the full impact of rate reductions from the Bank of England.

David Hodgkinson, who is chief operating officer of Europe's largest bank, said banks around the globe are re- evaluating the price they put on risk, raising the price of loans when compared with levels in previous years.

``Credit has to be priced appropriately to reflect the risk,'' Hodgkinson said in an interview today. ``If interest rates are brought down significantly, then rates for borrowers will come down. But I'm not going to say it's absolutely linear because it depends on the particular transaction and the risk.''

Brown has called on banks to return lending to 2007 levels after a worldwide squeeze on credit dried up the appetite for risk at banks. In Britain, banks approved 33,000 mortgages last month, a third of the 104,000 a month average last year.

Bank of England policy makers cut their benchmark rate a half point last month and probably will lower it again by the same amount to 4 percent on Nov. 6, according to a survey of economists by Bloomberg News. Governor Mervyn King has said he doesn't expect the full extent of the bank's rate reductions to be felt directly by consumers.

``The age of innocence -- when banks lent to each other unsecured for three months or longer at only a small premium to expected policy rates -- will not quickly, if ever, return,'' King said on Oct. 21.