Monday, February 24, 2014

Bank lending accelerates

The growth of C&I Loans (a proxy for bank lending to small and medium-sized businesses) has accelerated since late November, and C&I Loans outstanding are now at a new all-time high of $1.64 trillion. Over the past 3 months, this measure of bank lending has grown at a 16.4% annualized pace, the fastest since Q3/12, when Eurozone sovereign default risk was declining from record levels. Lending is up at a 10% pace over the past six months, and 8.7% over the past year. Total loans and leases at all commercial banks have jumped by $88 billion in the past 8 weeks, and now stand at  $7.46 trillion—not yet a record high, but closing in on the $7.74 trillion high set in October 2008. Banks are evidently relaxing their lending standards, and/or businesses and consumers are more willing to borrow.

 All of this reflects increased confidence, and that bodes well for future economic growth.

1 comment:

Benjamin Cole said...

I love this C&I chart Grannis puts out and I am surprised more people don't do QE working? Or would banks lend anyway?