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Bank lending update

The significant increase in bank lending to small and medium-sized businesses (otherwise known as Commercial & Industrial Loans, and shown in this chart) is not getting the attention it deserves, so I continue to revisit this series each week. C&I Loans have posted a 10.7% annualized gain over the past 3 months, and have jumped over $50 billion from last September's low. Those are impressive gains on the margin, but still only a drop in the bucket of total bank credit (about $9.1 trillion) and the M2 money supply (about $9 trillion). Nevertheless, this series continues to demonstrate that in aggregate, banks are increasingly more willing to lend, and businesses increasingly more willing to borrow, and that adds up to an increase in confidence overall, which is an essential ingredient if the economy is to continue expanding.

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