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As I have discussed before, US commercial banks have taken in more deposits than they lend out. The first big break was in 2009 during the financial crisis and the second break occurred in the Covid recession. After the second break, loans and leases actually decreased while bank deposits skyrocketed.
US banks are seeing record stronger demand for credit cards. Auto loan demand is closer behind.
And we are seeing loosening of standards for loans.
Yet loans and leases have subsided after the initial surge following The Fed’s massive asset purchase spree in March 2020.
This is truly a bizarro banking world.
