One year after the credit crisis began lending conditions have only gotten worse not better from looking at the survey of senior credit officers. We are at higher percentages for both the number of credit officers who see tightening credit conditions and an increase in spread on loan rates from large and medium institutions.
The message is clear. Banks are making it harder for anyone to get credit and if they do decide to give you some money, it will be at more expensive terms. The terms are worse than the last recession and the tightening is on par with the 2000 recession.
Regardless o what the Fed is doing money is not leaving the banks. This will show up in a lower velocity of money. Even if the money supply is growing faster, you can still have a restrictive monetary policy if the money is not being used to stimulate the economy.
There is not going to be an quick economic turnaround if the credit officers are holding tight to their loanable funds.
The message is clear. Banks are making it harder for anyone to get credit and if they do decide to give you some money, it will be at more expensive terms. The terms are worse than the last recession and the tightening is on par with the 2000 recession.
Regardless o what the Fed is doing money is not leaving the banks. This will show up in a lower velocity of money. Even if the money supply is growing faster, you can still have a restrictive monetary policy if the money is not being used to stimulate the economy.
There is not going to be an quick economic turnaround if the credit officers are holding tight to their loanable funds.
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