Why, then, would they make what the facts indicate are bad loans?

Greed is a partial answer, sure. This is hardly the only place where corporations trade risk in the distant future for revenue today.

But my instinct is that the greater part of it is inertia. They make the loans because they've always made the loans and it will take a good deal of energy to change that.

My guess is that it's an area where change will come as a short, very sharp shock. One year all the banks will make these loans and the next year none of them will.