N.E. governors to meet with banking regulators

CONCORD, N.H. — Gov. Judd Gregg and other New England governors will meet Monday with federal banking regulators in Washington to enlist their help in loosening tight lending by the region’s banks.

On Tuesday, Gregg announced he and Govs. John McKernan of Maine and Michael Dukakis of Massachusetts will meet separately with Robert Clarke, comptroller of the currency, and Federal Reserve Board Chairman Alan Greenspan.

Federal regulatory practices have contributed to New England’s unhealthy economy by making banks fearful to lend to clients who previously were considered good risks, Gregg said.

Gregg said the lack of credit makes it harder for the region’s economy to recover from the doldrums it is in.

At the meetings, the governors will ask Clarke and Greenspan to reassure the banking community it won’t be penalized for issuing loans to good credit risks. The governors also will seek help getting more capital invested in the region.

“They know where the capital resources are,” said Gregg.

Problems in other parts of the country, particularly the Southwest, prompted the regulators to clamp down on some banks, requiring them to have more capital assets, which meant fewer dollars for loans.

“There are problem banks in New Hampshire and New England. We all know that,” said Gregg. But he said that federal regulators’ strict response to problem banks made healthy banks fearful of being penalized if they aggressively extended credit.