U.S. lenders, criticized for being too reckless in the past and too stingy in the present, have been sitting on as much as $1.29 trillion in cash, equal to a record 98 cents for every dollar of existing business loans.

The ratio of cash to corporate loans has more than quadrupled from 21 cents in June 2008, according to Jan. 13 Federal Reserve data compiled by Bloomberg. Corporate loans shrank 14 percent to $1.32 trillion during that period as bankers tightened standards to curb record defaults and meet demands by regulators for more liquidity.

Banks are leaving more cash idle amid slack demand from borrowers throughout the economy and concern that regulators will require more liquidity to forestall another financial crisis. That's crimping profit, and the result may be a drop in returns on equity by about 33 percent from pre-crisis levels, according to analysts at KBW Inc.

"It is a less-sexy business," said David A. Hendler, senior financial services analyst at CreditSights Inc., who sees banks losing their image as a growth industry on Wall Street. "The master-of-the-universe action-figure banker is now a relic on eBay."

Cash piled up even as President Obama beseeched bankers to lend more and drive down the 9.7 percent jobless rate. Among the three biggest U.S. banks, the one with the highest ratio of cash to corporate loans is New York-based Citigroup Inc. — whose biggest investor is the U.S. government with a 27 percent stake.

Citigroup's $193 billion in cash and deposits with other banks as of Dec. 31 stood at $1.15 for each dollar of existing corporate loans, which totaled $167 billion, according to data compiled by Bloomberg. That's double the ratio in June 2008, when cash totaled $113 billion against $222 billion of corporate loans at Citigroup, which ranks third in the U.S. by assets.

JPMorgan Chase & Co., ranked second and based in New York, showed a ratio of $1.08 as of September, the date of its most recent report to the Securities and Exchange Commission of its commercial loan totals.

At Bank of America Corp., the biggest U.S. lender, cash and deposits at other banks tripled to $146 billion, or 64 cents for each dollar of commercial loans at the Charlotte, North Carolina-based bank.

"Generally speaking, our cash balances are higher this year than in previous years as a result of more stringent liquidity requirements that require stable sources of funding," Bank of America spokesman Jerry Dubrowski said. Loans declined recently "because of lower demand and the fact that some clients are taking advantage of the robust bond markets to manage bank debt levels," Dubrowski said.

The lost earnings power tied to idle cash could amount to several billion dollars a year industrywide. If banks were earning 5 percent on the $200 billion of business loans that vanished since June 2008, they would have another $10 billion of annual interest revenue.

Citigroup's stash earned 0.6 percent in annualized average interest in the three months through December, while its corporate loans averaged 5.78 percent, the company reported. Based on that difference, if Citigroup lent out $50 billion of its cash — which would restore its corporate loan book back to its June 2008 size — the bank would make $2.5 billion more in annual interest revenue.

Citigroup Treasurer Eric Aboaf said on a Jan. 21 conference call that stable markets will allow the bank to invest more of its cash. "There is less of a need to hold as much outright cash on the balance sheet," he said. "You will see it over time being invested in earning assets. I'm not going to predict exactly how much and when, but that is clearly the direction that we are taking."

Unused cash is a drag on profit, reflecting a shift toward safety by lenders and less demand from borrowers because of the slow economy, said Frederick Cannon, associate director of research at New York-based KBW, which specializes in financial firms. When the economy and finance get back to normal, KBW predicts bank returns on equity will be 10 percent to 14 percent instead of the 18 percent to 20 percent that prevailed in the two decades before the bust.

"Banks have to invest some of their excess liquidity and they have to figure out ways to grow loans," Cannon said.

Obama prodded leaders of the nation's biggest banks at a Dec. 14 White House meeting to step up business lending and fuel the economic recovery. On Feb. 2, Obama announced a plan to make $30 billion available for lending through community banks to small firms.

At the same time, lax lending standards have been blamed for creating the financial crisis, with Senate Banking Committee Chairman Christopher Dodd, the Connecticut Democrat, becoming the latest lawmaker to decry banks for "reckless behavior."

According to data from the Fed's bank balance sheets, the ratio of cash to corporate loans reached a record 98 cents on Jan. 13.