According to data from the FDIC, in the year ending March 2011, loan volumes fell $260 billion. This is in the wake of deposits that grew by $300 billion and assets that have grown by $80 billion. In addition, profits were up by $12 billion.
Lawrence Yun, Chief Economist of the National Association of Realtors®, noted in a recent article that the economy is slowed when banks accumulate profit at the expense of lending.
Unemployment, underemployment, the trace deficit, tornadoes, and many factors can affect the economy; but banks have traditionally paid interest on deposits and loaned to depositors while investing to make additional profits.
Tight lending conditions can result in further price declines in home values, although prices in some areas are solid or heading up according to Yun.
The housing recovery and economic recovery can be sped up by banks returning to their roots of lending more when deposits are up. Although caution has been in order as more homeowners have defaulted, particularly when mortgages are under water, reducing lending to a trickle is not the way to keep the economy healthy. In the long term, what is good for America is good for the banks.
Lawrence Yun, Chief Economist of the National Association of Realtors®, noted in a recent article that the economy is slowed when banks accumulate profit at the expense of lending.
Unemployment, underemployment, the trace deficit, tornadoes, and many factors can affect the economy; but banks have traditionally paid interest on deposits and loaned to depositors while investing to make additional profits.
Tight lending conditions can result in further price declines in home values, although prices in some areas are solid or heading up according to Yun.
The housing recovery and economic recovery can be sped up by banks returning to their roots of lending more when deposits are up. Although caution has been in order as more homeowners have defaulted, particularly when mortgages are under water, reducing lending to a trickle is not the way to keep the economy healthy. In the long term, what is good for America is good for the banks.
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