It’s true: large lending institutions are sitting on record breaking amounts of money while small and medium business scramble to get financing. We found this kind of discouraging article at Fortune magazine online. Here’s a sample –
“The biggest U.S. banks tell us they have spent the past quarter writing loans, renewing credit lines and generally being upstanding economic citizens. Bank of America (BAC) says it provided consumers and businesses with $144 billion in credit in the first quarter, Wells Fargo (WFC) ponied up $151 billion and JPMorgan Chase (JPM), swinging for the PR fences, claims to have lent out an improbable-looking $450 billion.
Yet loan balances actually shrank from a year ago at all three banks in the first quarter, just as they did at their old pal Citi (C). This at a time when the too-big-to-fail four are being drenched with new deposits (see chart, right).
All told, average loans outstanding at the fearsome four dropped 7% from a year earlier – a decline of $210 billion — even as deposits rose 5%.”
Read the entire article here.