Increase In Bank Lending Is Great News But Not A Surprise

The Wall Street Journal reported this morning that “U.S. banks are starting to increase their lending to businesses” and that the demand for loans from corporations is increasing.  This is very good news, but hardly surprising.  The additional lending is happening because of the same thing that has been driving both the bond and equity markets in recent weeks: An obvious increase in consumer demand for goods and services.  Add the projected positive impact of the recently enacted tax deal, which will clearly put additional dollars into consumers’ pockets in 2011, and it’s completely understandable that the same businesses that over the past year or so were reluctant to borrow now see  a need to invest in plants, equipment, raw materials, and employees.  This translates directly to the type of increased corporate lending the Journal reported.

About Steve Bartlett

Steve Bartlett is President and CEO of The Financial Services Roundtable, and has served in that role since June 1999. Previously, he was the Mayor of Dallas, Texas (1991-95), a Member of the United States Congress (1983-91), and on the Dallas City Council (1977-81). At The Financial Services Roundtable, Mr. Bartlett has had a major impact on legislation including Gramm-Leach-Bliley, E-SIGN, the 2001-2003 Tax Cuts, the Fact Act (FCRA), Class Action Reform, consumer bankruptcy reform, regulatory reform and TARP.
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