Unconventional banking wisdom

By Geert De Lombaerde Posted on January 14, 2009 at 7:31 am

Gary Townsend says the Fed’s numbers show that, contrary to popular and political opinion, banks are in fact still lending money. Outstanding loan balances have grown in almost every category since the recession began in December 2007.

Also, the Fed’s recent Consumer Credit Report (January 8, 2009) suggests that commercial banks are taking market share from finance companies, savings institutions, and especially securitized asset pool, which continue to contract materially. Until confidence is restored, closed securitization market will inhibit improved residential mortgage and consumer credit availability.

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