"There is huge demand for loans and large amounts of deposits, " he says.
Manufacturing activity has declined as has the demand for loans, according to the latest report from the Federal Reserve Bank of Kansas City.
Banks wiped 17 points off the FTSE amid revived worries of a possible rise in UK rates that would hit demand for loans.
Serasa Experian, a credit analyst, says that demand for loans between January and April was nearly 8% lower than during the same period in 2011.
Meanwhile the rapidly rising house prices of the past few years have driven many would-be home owners out of the market, cutting the demand for loans.
But demand for loans from consumers is weak, especially in areas such as credit cards and mortgages, although banks hope that these will soon start to rebound.
On the revenue side, net interest margins on new loans remain pitiful, partly because demand for loans is low and the banks are so eager to lend.
Rohit Arora, chief executive of Biz2Credit, a small-business lending broker based in New York, says demand for loans from small firms is picking up as sales improve and businesses become more creditworthy.
"We all (would) like to see better growth in credit, banks being more willing to make more loans to consumers, demand for loans rising, " said Omair Sharif, an economist at RBS in Stamford, Connecticut.
Closer to home, demand for loans outran supply.
FORBES: March 2012, US Leveraged Loan Market Trends and Analysis
Interest rates can range from 15% for secured auto loans to as much as 40% for unsecured loans, appliances and electronics, driven by high demand for loans and little or no credit history for the borrowers.
The fact is even in the depths of a recession a banking system flush with excess reserves is always in a position to pyramid up its deposit liabilities, to create Uncovered Money Substitutes, regardless of the demand for loans.
FORBES: Monetary Watch December 2010: The Money Supply, a triple from here?
Alan Greenspan, the former Federal Reserve Board chairman who has been criticized for keeping interest rates so low in 2003 and 2004 they fueled the housing bubble, testified earlier Wednesday that demand for loans to securitize, especially by Fannie Mae and Freddie Mac, were what inflated the bubble, not low short-term interest rates.
Which means there is much more demand for overnight loans on the repo market than for year-long loans.
But much of this increase in money is locked up in the banks because the Fed now pays interest on the bank reserves held at the Fed (and therefore it is not lent or spent), because of increased regulatory restrictions that discourage banks from making loans to small businesses and consumers, and because of the lack of demand for new loans.
Meanwhile, banks report that demand for consumer loans continues to drop, although at declining rates.
If there is demand for SME loans, including no-collateral financing, should not the market provide it?
Demand for these loans has been driven in part by a surge in luxury home sales.
The company also announced yesterday that third quarter profits rose less than expected because demand for home loans slumped.
Jersey used to be a hub for debt securitisation, but the demand for bundling loans has fallen off, leaving lawyers with less work.
So there is little demand for bank loans, and little supply.
The left cannot have it both ways, blaming the private sector for subprime lending while absolving the government policies that created the demand for subprime loans.
The bank has also seen a rise in demand for construction loans in smaller metropolitan areas, where the real-estate recovery is following those seen first in bigger cities such as New York and Washington.
The higher interest rates began cooling demand for auto loans in March, and expectations are that the economy will begin to slow from the 5.5% gain in the last 12 months ending March 31.
Still, it should be stressed that a major reason Countrywide and other mortgage outfits were able to expand so rapidly, particularly in the new millennium, had to do with the fact that outside of Fannie and Freddie, there was great demand for the loans made toward an asset the value of which was rising.
FORBES: Book Review: Reckless Endangerment by Gretchen Morgenson and Joshua Rosner
Slow economic growth has reduced the demand for commercial banking loans, which accounts for nearly a third of all loans outstanding for Bank of America.
Another sign of the slowing economy is that the overall demand for small business loans in April was down by 5.4% , slipping for the first time in a year.
Demand for new home loans fell to a nine-year low in April as rising interest rates dampen enthusiasm for housing.
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