Question

Discuss how commercial lending has recently changed from the 2009 recession. Has lending tightened to corporations? Provide current article research to support your findings.

Answer 1

If we check the Commercial and Industrial (C&I) lending is at max high of his life, which is almost  $2.1 trillion in loans to businesses currently on the records of US commercial banks. After taking a hit following the financial crisis, the aggregate level of commercial lending has increased by more than 35% since 2010,

It is high because of the lower Interest which is improving the economic conditions.

Also line by line, banks' funding needs the funding sources as well. Reports that banks used to furnish to examiners every quarter started arriving daily. Things are speeding at pace of light and companies were required to make the strategic decisions on how to make balance between the liquidity and capital.

Before the financial crisis the number of commercial loans to small business were stop or say standstill during the crisis. THis even leads to large banks were even out for teh small business loan till next few years. In two years the loan were declined by billions.

Counting this year it's been 11 years from the crisis during which the 100,000's of people lost jobs and homes as well. Public was loosing trust/confidence form the banks after seeing the financial firms in trouble.

If we check that this leads to increase in number of banks enough high almost aroud 130 - 140+  which is high of all the time. Although later the numbers has fallen drastically. They all were checking that they had hard enough plan for staying liquid. What if what we are expecting doesn;t happen! what the backup to this plan to remain in the market. As we know the liquid is very important for the bank to meets the short term requirements like same day payments or deposit withdrawal or anyother debt payments, Things were getting hard every month / quarter.

In october 09 the unemployment rate rose by around 10% first tiem since 80's. Later the democratic party administration came up with 700+ billion $ plan that created the jobs, Economic growth finally turned positive by mid year and the Great recession was over. This plan helps the lending money to with loose ends so that the confidence loosen by public in the financial crisis should get back.