Despite the banking turmoil, it doesn’t look like there’s a lending crisis
In the wake of the failure of Silicon Valley Bank in March, turmoil in the banking sector persists. And because bank lending is so critical to economic activity, all eyes have been on lending data.
The emerging concern was that bank turmoil would cause an extraordinary drop in lending as banks substantially tightened their purse strings beyond what the Fed was aiming for. Fortunately, the data doesn’t yet support this more worrisome outcome.