The Vital Link Between Banks and Jobs

Easier credit may create more jobs
Photograph by Akira Sakamoto/Gallery Stock

The gradual easing of lending standards by U.S. banks may help lower the jobless rate. According to a report by Drew Matus, an economist at UBS, “easier lending standards are usually associated with faster employment growth.” Quantitative easing by the Federal Reserve has left U.S. banks with plenty of money to lend. According to UBS data, since the start of the third quarter they have started to relax lending standards—especially when compared to their approach during the depths of the recession, when the banks were not extending credit.

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