How is this possible, you might ask? Oil, after all, is booming. Clients are making a fortune, deposits are at record levels, and the outlook is for a seemingly endless stream of cash flowing into every bank with an oil division.

But in a quirk of life which falls into the truly bizarre category, too much money coming in is a problem simply because the stuff that comes in has to be loaned out and right now there is not a lot of demand for bank finance.

Best example of this problem is at the top end of town where Big Oil is posting profits in the billions of dollars per quarter.

But, even at the small end of town most producers have paid off their debts and are building up cash on deposit. There is the added problem of there being fewer clients who want to borrow because of widespread merger mania of the 1990s.

In one recent observation on conditions in the oil patch the chief executive of Devon Energy, Larry Nicholas, lamented the decline of independent oil producers in the U.S. For the Slug this was of passing interest, until he saw the numbers quoted by Nicholas – numbers that reinforced the problem being faced by our good friends at the bank.

Between 1988 and now, according to Nicholas, the number of independent publicly-traded oil stocks has fallen from 400 to 100, a massive decline in the ranks of the industry, and a massive decline in potential bank customers.

Layer over this contraction of the customer base with the fact that the survivors are bigger and now enormously profitable and you start to see the point about feeling sorry for your local banker (a comment followed by a quick swirl of Listerine for The Slug).

Humour aside, the plight of the banker is an interesting one for another reason. Tough times in any industry can cause an unusual reaction. In a credit squeeze and a time of low oil prices, for example, a bank can choke a client to death.

What happens in reverse conditions; like now; when a bank is stuffed to the gills with cash and finding it hard to find someone to lend to?

The Slug, a seasoned observer of changing circumstances, reckons that a time of loose money has the potential to be as damaging as a time of tight money for a very simple reason – the bank will force feed a client, load him up with loans, even introduce deals, and encourage business flow.

Some of the recent floats The Slug has seen hit the Australian Stock Exchange smell a little like the concoction of desperate bankers. It is not too hard to imagine something like this: A desperate banker has a client with a pile of moose pasture in one waiting room, and another client looking to get into the oil industry to catch the high prices – a situation ripe for a deal.

Client A (he with the moose pasture) is introduced by the banker to Client B (the greenhorn entrant). The deal which emerges sees A extract a ridiculous prices because B is super-keen, and the bank more than willing to load-up B with a mountain of cash – and a future debt servicing obligation.

Call The Slug a cynic, but don’t call him a fool because desperate bankers can be almost as much trouble as desperate housewives.