Break Down of Total Bank Credit Growth

The break down of total bank credit illustrates the fragility that still exists within the banking system. Business, real estate and home equity loans, which constitute nearly 60% of total bank credit, continue to contract. Business loans as a percentage of total business created, an engine of future economic growth, has fallen sharply from 17% to nearly 13%. This reduction in economic productive loans has been offset by a sharp rise in nonproductive, consumer loans. Consumer loans as a percentage of total bank credit have risen from 9% to nearly 13%. The cancer of consumption without investment continues in America. Also, the pick up in defensive, cash assets should not be ignored. Cash assets as a percentage of total bank credit have expanded to 14%. The upward trend in cash assets reflects the fragility that still exists within the banking system.

Break Down of Total Bank Credit Growth: Year-over-Year Growth for Total Loans, Business Loans, Real Estate Loans, Home Equity Loans, Consumer Loans, and Cash Assets for Commercial Banks in the US.


Source: federalreserve.gov