Sunday, August 12, 2012

No shortage of money (cont.)


Bank loans to small and intermediate-sized businesses continue to grow at strong, double-digit rates: 13-15%.

It's not the amount of loans generated, it's the fact that they are increasing relatively rapidly that's important, since that means that a) banks are more willing to lend on the margin, and/or b) businesses are more willing to borrow, and both imply an increased confidence in the future. Either way, new bank lending is expanding the supply of money, which is growing faster than its long-term 6% annual rate.



5 comments:

Benjamin said...

Nice to see commercial moan volume rising.

Does QE play any role in this?

Dr William J McKibbin said...

I wonder what percentage of this loan activity relates to "bailout" funding now underway for JCPenny, Sears, and other at-risk retailers -- a segmented analysis of the borrowing would be helpful -- but yes, money seems to be available for businesses -- I need to understand this borrowing better -- I'll do some research in the meantime -- interesting...

sgt.red.blue.red said...

Does this measure just NEW loans, not refinances of bullet loans currently outstanding?

Scott Grannis said...

The chart measures the amount of C&I Loans outstanding, net of refis.

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