The Treasury Department has released the first in a series of monthly reports (.pdf) on the banking industry, detailing the lending history of the twenty banks that have received the most substantial infusions under the Troubled Asset Relief Program.
These twenty banks include Citigroup Inc., Bank of America Corp., The Goldman Sachs Group, and Morgan Stanley, and all told represent 90 percent of all banking deposits. They have received more than $240 billion in TARP funds.
Based on its review of new lending over the past three months, Treasury reported that "banks continued to originate, refinance, and renew loans" in spite of the challenging economic climate. Nevertheless, "the crisis has negatively impacted confidence in our financial system, limiting banks' ability to raise private capital that enables them to increase consumer and business lending."
Overall, total loan balances decreased over the three month period, with median total residential mortgage balances and mean total corporate loan balances each decreasing by one percent, and median commercial real estate originations decreasing by 19 percent.
Wells Fargo & Co. had the most first mortgage originations during the period, making $48.2 billion in home loans. Bank of America was second with $44.6 billion and JPMorgan Chase & Co. with $28.3 billion. In some cases, these represented large month-to-month increases, as declines in interest rates spurred borrowing late in 2008.
Average credit card loan balances rose 2 percent, perhaps the most telling sign that traditional financing structures are weakening while the economic environment deteriorates. This suggests that consumers, as well as businesses, are relying more and more on inferior credit to pay their bills. The report also noted that consumers were adding to their balances even as banks were reducing available credit.
In addition to providing median survey results, the Treasury report includes details on the recent lending history (.pdf) of each of the twenty banks, as well as a narrative response from the companies which includes "a general commentary on the lending environment, loan demand, any changes in lending standards, and any other intermediation activity."
BailoutSleuth will continue to monitor these monthly reports for signs that the banks are using the TARP money in the way that Congress intended.
These twenty banks include Citigroup Inc., Bank of America Corp., The Goldman Sachs Group, and Morgan Stanley, and all told represent 90 percent of all banking deposits. They have received more than $240 billion in TARP funds.
Based on its review of new lending over the past three months, Treasury reported that "banks continued to originate, refinance, and renew loans" in spite of the challenging economic climate. Nevertheless, "the crisis has negatively impacted confidence in our financial system, limiting banks' ability to raise private capital that enables them to increase consumer and business lending."
Overall, total loan balances decreased over the three month period, with median total residential mortgage balances and mean total corporate loan balances each decreasing by one percent, and median commercial real estate originations decreasing by 19 percent.
Wells Fargo & Co. had the most first mortgage originations during the period, making $48.2 billion in home loans. Bank of America was second with $44.6 billion and JPMorgan Chase & Co. with $28.3 billion. In some cases, these represented large month-to-month increases, as declines in interest rates spurred borrowing late in 2008.
Average credit card loan balances rose 2 percent, perhaps the most telling sign that traditional financing structures are weakening while the economic environment deteriorates. This suggests that consumers, as well as businesses, are relying more and more on inferior credit to pay their bills. The report also noted that consumers were adding to their balances even as banks were reducing available credit.
In addition to providing median survey results, the Treasury report includes details on the recent lending history (.pdf) of each of the twenty banks, as well as a narrative response from the companies which includes "a general commentary on the lending environment, loan demand, any changes in lending standards, and any other intermediation activity."
BailoutSleuth will continue to monitor these monthly reports for signs that the banks are using the TARP money in the way that Congress intended.
published February 18, 2009, 0 Comments
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