With all the inflammatory talk about banks not lending, these charts from the St. Louis Federal Reserve present a different picture. I’m sure lending to certain sectors has dried up, but overall activity still seems robust.
Commercial and Industrial Lending
The chart above shows weekly commercial and industrial lending activity from large commercial banks and it would appear that lending activity is far higher than it was a year ago or even at the beginning of the year. Activity peaked in the summer and now it is starting back up again. This chart goes through September of this year.
But, what about the consumer? Clearly, banks are not lending to consumers and consumers are not borrowing, right? Maybe that’s not quite accurate either in spite of media reports:
Consumer Lending
As we can see, consumer loans from commercial banks went up at least through the most recent data the St. Louis Fed had, which was August. The evidence is clear — at least through August, consumers were borrowing and commercial banks were lending them money.
Finally, what about real estate loans? We all know what the conventional wisdom is — that real estate lending has dried up. This final chart covers real estate loans from commercial banks and these loans did peak in April of this year, but lately activity has picked up. Even with the pullback, real estate lending is higher now than a year ago and higher than it was in the beginning of the year.
Real Estate Lending
I realize that this information contradicts the conventional wisdom we are hearing from the media and our political leaders, but these are facts, not rhetoric. It may well be that lending activity at banks is going to dry up, but there is no evidence from the St. Louis Fed that suggests such activity has already dried up. In fact, the evidence is that activity in all three areas is higher than it was at the beginning of the year.
Fundmastery Blog Blog Archive Are Banks Still Lending?
