In the United States, since the banking crisis, banks lend less money

Bank loan volumes in the United States “decreased” in March and early April, that is, since the banking crisis caused by the bankruptcy of the SVB bank, according to a survey by the US central bank (Fed) released on Wednesday.

“Loan volumes and loan demand have declined for both personal and commercial loan types,” the Fed noted in its “Beige Book,” a barometer of activity conducted among the twelve 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.

A “significant” drop

In early March, Silicon Valley Bank (SVB) and Signature Bank went bankrupt after 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,” the Fed’s regional office said, quoted in the Beige Book.

“Credit standards have tightened significantly and several institutions have chosen to reduce loan volumes, particularly for new clients, despite ample liquidity,” it said.

This tightening of credit conditions was also seen on the other side of the country, in the Philadelphia area south of New York, where “bank lending to businesses has declined.”

more cautious banks

“Most of the contacts within the banking sector have confirmed a tightening of credit standards (…), after the bankruptcies of Signature Bank and Silicon Valley Bank,” the report further specifies.

And “several contacts indicated that they were focusing on lending to existing customers and had become more cautious when lending to new customers,” it continues.

US Treasury Secretary Janet Yellen agreed on CNN on Sunday that US banks could become “a little more cautious” in their operations, which could lead to a tightening of credit conditions.

A few days earlier, however, it had indicated that it “had not seen evidence, at this stage, of a tightening of credit conditions, although that is a possibility.”