If losses, or anxiety about losses, prevents lenders from lending in any quantity the economy will go down the tubes. It's not so much the past losses but how the affect future behavior that matter for the real world.
Doug ^^^^^^^ CB: Yes, but it is usually said that they can't make any profits on money that they just hold in their hands. So, there is a contradiction. They _must_ try to invest it. They have double anxiety, poor things. They have anxiety about losing it in an investment,and anxiety about not making anything off it if it just sits in their coffers.
