The Banking Credit Freeze Is Finally Beginning To Thaw

Right now, the freeze on bank lending is beginning to thaw, as consumers continue to pay down their debt.

From Deutsche Bank:

Consumer credit is projected to be down slightly in May, but we should not be concerned because the credit crunch is actually abating. According to the Fed’s latest Senior Loan Officer Survey, commercial banks’ willingness to make consumer loans continues to expand.

Deutsche Bank attempt to prove this:

Consumer Credit

While Deutsche Bank limit their positivity with continued concerns over unemployment, we fear that consumers and companies alike are still far more concerned about paying down debt to take on new loans or other credit instruments.

If there is to be any thaw, we feel it will be slow and severely mitigated by the unemployment crisis.

Check out Richard Koo’s awesome presentation on balance sheet recessions >

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