As the nation heads into recession -- or what Bush economic adviser Michael J. Boskin calls a "lull" -- officials worry that bankers gun-shy over the savings and loan crisis are making the situation worse by closing their lending windows, even to creditworthy customers.

Treasury Secretary Nicholas F. Brady told a New York audience the other day that they should keep on lending to sound borrowers. And he urged regulators to avoid following "unrealistically negative scenarios in evaluating loans." The commercial bankers' tendency to hunker down also has been noted by Federal Reserve Board Chairman Alan Greenspan and by Boskin, who said that some regulators in their effort to assure safety had become "overzealous."

Clearly, excessive caution will make it tougher to overcome recession, even assuming that the Federal Reserve continues to lower interest rates into 1991. An ameliorating factor in the situation is that because of the recession, total credit demands have turned down, allowing interest rates to fall even though the inflow of foreign capital has ceased.

But it will take more than jawboning by the Bush administration to solve the mushrooming problems of the U.S. banking system, which is desperately short of capital. Banks -- like all U.S. financial institutions -- have suffered a deterioration in quality. Henry Kaufman points out that there is no longer a single American bank holding company entitled to a full triple-A rating, whereas there were more than a dozen in the mid-1970s.

"More troublesome," says Kaufman, "many large banking institutions have debt obligations outstanding that yield 4 to 6 percentage points more than comparable U.S. government securities, and have equity-market values at large discounts from their book values."

The decline in stock-market values of the major banks has been stunning. Lazard Freres & Co. senior partner Felix Rohatyn pointed out the total market value of the Chase Manhattan Bank and the Chemical Bank has shrunk to about $1.25 billion each, while Citicorp's market value is a mere $3.5 billion, all around one-fourth of their worth a year ago. For perspective, the market value of the Union Bank of Switzerland is $10.25 billion; Deutsche Bank, $15 billion; and Sumitomo Bank, $41 billion.

Why is the decline in the value of bank stocks of significance, far beyond its impact on owners of those shares? David Hale of Kemper Financial Services points out that in early October, the market capitalization of the 10 largest American banks had dwindled to only $26 billion, compared with a nominal book value of $41 billion and total assets of $940 billion.

"If the stock market is valuing this equity correctly, several of the leading banks now have capital adequacy ratios well below their 1992 regulatory target of 4 percent and will have to slash dividends or curtail lending," Hale says. "In fact, once the Persian Gulf crisis is resolved, the bank crisis is likely to emerge as the major potential black hole in the economy."

Hale and Kaufman agree with Rohatyn that, "As we enter what could be our most dangerous recession since World War II, our banking system is in urgent need of new capital. The greatest danger to our economy, today, is the inability of our financial institutions to provide the credit needs of a stagnant economy. The S&L industry is moribund; insurance companies are under significant pressure; the banking system is woefully undercapitalized and is compounding our economic downturn by drastically shrinking the availability of credit."

What needs to be done?

Brady signaled that the administration next year will propose an overhaul of the banking system -- including reforms of deposit insurance -- aimed at facilitating the ability of banks to compete with other financial institutions.

Of course, there is an inherent danger that this prescription -- freedom to "grow out" of present troubles -- will parallel the mistakes the Reagan administration made when it tried to encourage the S&L industry to "grow out" of its problems. But the still-exposed S&L wounds will probably make Bush and Brady cautious.

Among other initiatives, Rohatyn calls for a dramatic new approach to banking in which the Fed would aggressively encourage creation of banks large enough to compete with those in Europe and in Japan. He proposes an injection of $25 billion to $50 billion in new capital into the banks, through the purchase by the Fed of new nonvoting bank securities.

Kaufman thinks there needs to be an overhaul of the entire existing system of financial regulation to ease what he called "the crumbling" of credit. "We need centralization in regulation and supervision," Kaufman says, nominating the Fed for the job.

Trouble is that neither the Fed nor any other agency of government wants that onerous task. This means probably stumbling along as before, with the Fed needing to jump in, as the lender of last resort, to bail out failures on an ad hoc basis.