Little Fires in Banks Will Give Fed Something Else to Discuss
The market isn’t punishing lenders for being small so much as for not being big enough to be deemed too big to fail. And bracing for the FOMC.
Stormy weather for the Fed.
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Europe’s banks are making it harder for people to borrow, and its companies are much less keen on taking out loans. Those are the most important takeaways from the European Central Bank’s latest survey of banks’ lending standards, and at this juncture those numbers could scarcely matter more. The disintermediation of finance has not progressed as far in Europe as in the US, and banks — rather than bond markets — still tend to be the most important providers of credit. If the ECB wants to alter financial conditions, it must do so through the lenders.