The private sector must lead a recovery because it
alone produces goods and services. Without this sector, there can be no
reversal in job losses and no recovery. Here is more evidence that the
private sector is not expanding. It is still shrinking.
Banks cutting back on loans to businesses
Credit squeeze on entrepreneurs threatens to derail recovery
WASHINGTON (MarketWatch) — U.S. banks are reducing their lending at the fastest rate on record, tightening the credit squeeze and threatening to leave many otherwise viable businesses unable to borrow money to expand their businesses, meet their payroll or refinance their maturing debts.
According to weekly figures provided by the Federal Reserve, total loans at commercial banks have fallen at a 19% annual rate over the past three months, while loans to businesses have dropped at a 28% annualized pace.
Do those businesses really have no need for credit? Do they really have no desire to expand and grow their businesses? Have they think of relationship banking?
ReplyDelete