Blackstone Group CEO Stephen Schwarzman says banks may rein in lending due to a political environment that is becoming increasingly hostile to them.
“There’s a really good probability that the banks, starting in the us but also on a broader basis may start to restrict credit simply because the uncertainty and the tone against them is so difficult that they may lack the confidence to just start doing their normal functions,” Schwarzman told Bloomberg.
“That could really start to impact an economic recovery.”
“Until this latest round of attacks, I thought we were on a pretty good path,” Schwarzman notes.
“I think we have to return to a dialog of civility. We have to make sure (banks) have enough confidence to keep extending credit.”
“We need a healthy world… one that’s going to grow.”
International bank lending dropped by over $200 billion (122.8 billion pounds), or 0.8 percent, in the third quarter, marking a fourth consecutive quarterly decline as the financial crisis continued to restrain credit.
The Bank for International Settlements (BIS) said lending by banks fell by $235 billion in the July-September quarter.
These statistics — the only ones to chart cross-border lending around the world — show how banks have been cutting off funds to companies and to each other despite efforts by governments and central banks to unlock jammed credit markets, The New York Times reports.
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