Tags: Bank | Lending | Rise

Bank Lending Back on the Rise Again

Wednesday, 28 Dec 2011 07:41 AM

Banks are lending money again.

After declining in 2008, bank lending is increasing, spiking to an annual rate of 8.2 percent in July, USA Today reports, citing Federal Reserve data.

Fears that tougher new capital reserve requirements will hamper lending appear unfounded, as lending to businesses is especially on the rise.

Commercial and industrial loans grew at an annualized pace of more than 20 percent in August and more than 15 percent in October, the best performance since early 2008, USA Today adds.
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Commercial lending dropped 19 percent in 2009 and an 9 percent in 2010.

Even small businesses aren't complaining about access to credit.

A National Federation of Independent Business survey finds that only 3 percent of small-business owners point to a lack of credit is their most important problem, trailing taxes, regulation and still-sluggish demand.

"Two-thirds of business owners say, 'Who wants a loan?'" says Bill Dunkelberg, chief economist of the National Federation of Independent Business and also chairman of a small Pennsylvania bank.

"In thirty years, I've never seen anything like it. The banks all have money to lend, but there's a shortage of eligible customers coming in."

The Federal Reserve, meanwhile, is preparing to ask banks to set aside more capital to shield their holdings from external shocks.

The aim is to avoid a repeat of the Lehman collapse especially in light of the belief the U.S. economy remains vulnerable to the European debt crisis.

"The recent financial crisis showed that some financial companies had grown so large, leveraged, and interconnected that their failure could pose a threat to overall financial stability," the Fed says in a recent statement, according to the AFP newswire.

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Banks are lending money again. After declining in 2008, bank lending is increasing, spiking to an annual rate of 8.2 percent in July, USA Today reports, citing Federal Reserve data. Fears that tougher new capital reserve requirements will hamper lending appear unfounded,...
Bank,Lending,Rise
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2011-41-28
Wednesday, 28 Dec 2011 07:41 AM
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