2023-04-19 19:10:04
(Washington) Lending volumes by banks in the United States “decline” in March and early April, that is to say since the banking crisis caused by the bankruptcy of the SVB bank, according to a survey of the American central bank (Fed) published on Wednesday.
“Loan volumes and borrowing demand have declined for personal and business loan types,” the Fed noted in its “Beige Book,” a barometer of activity conducted among the 12 regions. of the US central banking system.
“Several regions noted that banks have tightened lending standards amid heightened uncertainty and liquidity concerns,” the document details.
In early March, Silicon Valley Bank (SVB) and Signature Bank went bankrupt following massive cash withdrawals from customers.
In the San Francisco area, where SVB’s headquarters are located, these withdrawals “would have stabilized since the end of March”, details the beige book.
But “lending activity fell significantly,” said the regional office of the Fed, quoted in the beige book.
“Lending standards have tightened significantly and several institutions have opted to reduce lending volumes, especially for new customers, despite ample liquidity,” it said.
This tightening of credit conditions was also observed on the other side of the country, in the Philadelphia area, south of New York, where “bank loans to businesses have declined”.
“Most contacts within the banking sector confirmed a tightening of lending standards […]following the bankruptcies of Signature Bank and Silicon Valley Bank,” the report further states.
And “several contacts indicated that they were focusing on lending to existing customers and had become more cautious in lending to new customers”, it is still indicated.
US Treasury Secretary Janet Yellen agreed on CNN on Sunday that US banks might become “a little more cautious” in their operations, which might lead to to tighter credit conditions.
A few days earlier, however, it had indicated that it had “not seen any evidence, at this stage, of a tightening of credit conditions, although that is a possibility”.
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