Does it mean "banks will not try to find ways to reduce their bad loans"?

"His argument against thinking of easier money as a tool to fix banks holds as an argument against a rate cut in general. “This would relax the pressure,” Acharya argues, “on good efforts that are underway … to improve the banking architecture.” In other words, if thrown a lifeline now, banks will have less of an incentive to clean up their books."

Source: https://www.bloomberg.com/view/articles/2017-07-27/there-s-one-good-reason-india-shouldn-t-cut-rates

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    To "clean up the books" means to take steps to eliminate bad investments that expose the bank to excessive risk threatening the stability of the institution. The "books" are the ledgers that state the bank's assets and liabilities.
    – TimR
    Jul 28, 2017 at 11:35

1 Answer 1


"Books" here refers to the list of bank accounts (which in the past would have been recorded in "books of account", but now are computer databases). This sense is used figuratively in lots of expressions for example "cook the books" means to enter false accounts.

To "clean up one's books" means to get the accounts in order: To identify profitable and loss-making accounts, To close or restructure the "bad" accounts and to release capital for future investment.

The author is suggesting that, if banks receive financial help now, they will not "clean up their books", and this would be a bad thing.


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