Lending Drops Most Since 1984
November 30, 2009
Lending by U.S. banks - the lifeblood of the auto industry -- fell 2.8 percent in the third quarter, the largest drop since at least 1984 and the fifth consecutive quarter in which banks have reduced lending, according to a Federal Deposit Insurance Corp. issued Tuesday and reported on by the Washington Post.
The paper said the decline in lending is emerging as a serious impediment to economic recovery.
The banks reduced the amount of money extended to their customers by $210.4 billion between July and September, cutting back in almost every category. Large banks, the beneficiaries of billions of dollars in federal aid intended to spur new lending, were responsible for a disproportionate share of the decline, the FDIC said.
The FDIC also said that just three new banks were created during the third quarter, the smallest number since World War II.
Posted by Michelle Krebs at 9:46 AM under Analysis , Business | Comments (0) | digg this | Seed Newsvine
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