As a credit union trying to serve our community and membership, we are beset with increasing regulatory pressures and expectations; all because some investment bankers in New York misbehaved (and some deranged fundamentalists made use of commercial banking services, another story altogether). But are these 'regulatory' and monetary policy tactics having the desired impact? In short, no.
In the minds of politicians, stimulus is the answer, but a large proportion of the resources being pushed out into the economy are not making any difference, the so called recovery is stalled. The principle reason for this is that the key 'intermediaries' are stuck - large banks and public companies. A culture of risk aversion is now present, rooted, first, in weak indicators and, second, a fear of another banking calamity.
For a great overview check out this post at Pieria. The upshot for credit unions is paradoxical; the new regulatory practices (largely fashioned for international banks) insist on 'reducing' lending risks at a time when local businesses and social entrepreneurs are eager to create jobs and resuscitate local economic activity. In the end, the financial system is not working.