PRESS RELEASE

U.S. Bank Non-Lending Is Worse than Claimed by Fed

June 11, 2014 (EIRNS)—Major U.S. banks did not lend in the 1930s Depression, even after Glass-Steagall reorganization, until pulled along by FDR with U.S. national credit; the same is true now, six years after the financial crash, because there is neither Glass-Steagall reorganization nor any national credit issuance.

A Bank of America report issued to stockholders June 9 and reported on ZeroHedge.com today, shows that that megabank's lending is far below what has been presented in the Federal Reserve's closely watched "H8" report on bank credit, and still dropping. A BoA spokesman, discussing the report, said only that the Federal Reserve's tracking of U.S. bank lending since early 2013 is "different" from BoA's own tracking (which includes the lending of other banks as well as its own). But looking at BoA's own lending (so-called "C&I", commercial and industrial loans), it is at less than 40% of its 2005 index level for new loans, and just 60% of its 2007 index level for renewed and extended credits. The bank reported that both measures were again declining in the 1st quarter of 2014.

About a month ago, ZeroHedge had reported that the above was true for at least JPMorgan Chase, Citigroup, BoA, and Wells Fargo, according to those banks' own 1st quarter reports. Yet the Federal Reserve reported on its "H8" that business lending had increased by $135 billion in the 1st quarter. The website had emphasized that these two claims could not both be true, and suggested the Fed's data was either manufactured to support the "exit from QE", or falsified by major errors, in which (unlikely) case the FOMC is "exiting QE" in ignorance of which way bank lending is actually going.

Bank of America‚'s report reinforces that, despite its great delicacy in referring to how it contradicts the Fed: "The last few months show some slowing, consistent with the weakness in capex spending. The Federal Reserve data are more volatile.