After the terrorist attacks, many banks moved quickly to help customers by forgiving missed payments on loans, covering overdrafts and payrolls and providing quick access to large sums of cash.
But the bigger question now is how U.S. banks respond to calls by the Federal Reserve and others to do more than just bandage the economic wounds.
The Fed has poured billions of dollars into the banking system to boost short-term lending and has lowered interest rates beyond expectations, sending bankers a clear signal to help keep the economy from collapsing.
"I've never seen anything like it," said American Bankers Assn. senior economist Rod Strand.
Unlike the early 1990s, when the banking system was ill-equipped to help fend off an economic recession, the industry is on stable ground.
Capital reserves are high and loan defaults are at relatively low levels--all of which is expected to help banks come to the aid of hard-hit borrowers.
But there also are some ominous signs, in particular the high debt loads of many consumers and companies. That might dampen banks' lending urge. Still, it's clear that regulators are counting on financial institutions to help lead the country through the slowdown and the recovery from the terrorist attacks.
The Fed said banks would "promote the public interest" by forgiving late fees caused by the attacks, giving sound borrowers more time to pay and easing paperwork for new loans.
On Monday, the Department of Housing and Urban Development invoked a 1940 federal act reducing interest rates on mortgages and personal loans to 6% and halting or limiting foreclosures and evictions for military reservists and members of the National Guard called to active duty.
The Soldiers' and Sailors' Relief Act, which last was used during the Persian Gulf War in 1991, is aimed at helping to offset financial hardships suffered by those called to military duty.
Two days after the strikes at the World Trade Center and the Pentagon, Michael J. Zamorski, acting director of supervision at the Federal Deposit Insurance Corp., told bank examiners in a memo not to criticize lenders for taking on greater risks to help customers recover from the disaster and its aftermath.
Even so, the banks face a dilemma like that posed by earthquake, flood and hurricane damage: how to sympathetically nurse good companies back to health without triggering a surge in defaults by lending to those beyond recovery.
