Credit Still Tight

by James & Miel on August 19, 2009 · 0 comments

A report published by the Federal Reserve this past Monday indicates that outside of prime loans, banks are still reluctant to loan money to people or businesses. It seems the consensus is credit will start to loosen significantly by the middle of next year, especially as demand picks up from where it is now. A separate study conducted by the Treasury Department seemed to indicate that mortgage demand has been rising, but demand for business loans continues to lag. It’s hard for there to be capital investment and therefore the creation of wealth when banks are not loaning. In both surveys, the underlying theme is pessimism; most of the executives and loan officers surveyed indicated that it might take another year before demand, credit-worthiness and access to funds return to desired levels.

Banks still reluctant to lend (CNN)

Federal Reserve Loan Survey

– Michael

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