Just as the bank failures in the Depression years bred a generation of conservative bankers, the new banking crisis is creating a cautiousness among lenders that bankers themselves say may slow the flow of loans long after the recession ends.
Many factors affect a bank's willingness to lend, from the health of the bank to the size of its underlying capital base. But none are as important as the mindset of the bankers themselves.
And there is widespread evidence that that mindset has changed in a way that may transform banking for months or years to come.
"There has been a trauma, and that trauma will make bankers cautious for a period of time," said Robert Hawkins, president of the Southern Commercial Bank of St. Louis.
The caution in banking circles represents a shift away from the free-lending approach of the heady 1980s and a return to more traditional banking standards.
What had loosened banking standards was partly deregulation, and partly the increased tendency of the most creditworthy corporations to borrow directly from the credit markets, bypassing the banks.
Pressed for business, the banks looked elsewhere for customers, competing to make higher-risk loans, including many in real estate -- a strategy that cost the banks dearly in loan defaults.
The new caution among lenders showed up repeatedly in 25 interviews with bankers, corporate finance officers and government officials. It is a caution that goes far beyond the credit tightening of the last year that the banks have often attributed to government regulators.
Even large, healthy banks say they are changing their ways.
"In all types of lending, the price -- the interest rate -- is not only higher, but the terms of the transactions are becoming tougher and will remain so," said Lewis Coleman, vice chairman of the Bank of America in San Francisco.
For consumers, the new caution shows itself in such things as slightly higher rates on bank credit cards -- they have already risen by nearly a percentage point in the last year, to an average of 19.6 percent -- smaller lines of credit and a growing reluctance to issue new credit cards to people who already hold one or two others.
Lenders are also requiring higher incomes from home buyers seeking mortgages, and often larger down payments.
They are declaring that any borrower, consumer or corporate, will have to show higher levels of income in the 1990s to qualify for loans than in the 1980s. And bankers increasingly are putting limits on how much they will lend to even the most creditworthy corporations.
"If someone wants $50 million from us, they have a tough sell on their hands," said Jerry Jordan, chief economist at First Interstate Bank Corp. in California, where lending officers once could make such loans without higher management's approval. "We are trying to limit how much exposure we have to any borrower."