Among the troubled sectors of the American economy, banks have taken center stage.

As Treasury Secretary Timothy Geithner noted last month, one of the keys to avoiding a deeper recession is the making more credit available at lower interest rates. Banks, however, are shying away from providing credit, because of pressures on their balance sheets from assets whose market prices are uncertain or depressed. These toxic assets exist because banks were taking too many risks, but now banks are overcompensating by taking too few.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.