As consumers and businesses remain reluctant to spend, cash has been flowing into the banks in the form of deposits. Given the lack of demand for loans, banks like Bank of America (NYSE:BAC) are not deploying much of these funds in the form of loans. However, given the low interest rates on loans, is it necessarily a bad thing that banks aren't extending gobs of credit right now?
In this video, Motley Fool banking analysts Matt Koppenheffer and David Hanson discuss the merits of being conservative during a time of record low interest rates.
David Hanson has no position in any stocks mentioned. Matt Koppenheffer owns shares of Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.