Our Scans · (FS.5.07) Inter-Bank Lending · Weekly Summary

• With interest rates falling, banks are eyeing a potential return to form for CRE lending in 2025 after two years of reduced activity. CRE Daily
• There could be bad news for anyone with a mortgage this week, as speculation is growing that the Bank of Canada is getting ready to start raising lending rates again. CBC
• As inflation cools and the Bank of England is expected to start cutting interest rates in June, experts forecasted a rebound in lending growth to 3.5% for 2025. Yahoo Finance
• Banks could lower rates charged on new loans to spur more borrowing, and the People's Bank of China could ramp up its funding-for-lending schemes. DNyuz
• When risk increases as a result of foreign geopolitical events, domestic lending by U.S. banks is consistently and negatively impacted: Banks significantly tighten domestic lending standards and reduce lending to domestic firms. Federal Reserve Bank of Boston
• Many banks will spend the bulk of 2024 trying to tighten lending standards and diversify their balance sheets away from risky assets such as CRE loans and even safe assets such as long-term treasuries. Deloitte Insights
• Some analysts expect the PBOC to cut the benchmark lending rate, or loan prime rate, this month, citing recent deposit rate cuts by Chinese banks and an expected pause in the U.S. Federal Reserve's rate hikes. Reuters
• US banks are doling out fewer loans to businesses as lending standards tighten and demand weakens after 11 interest-rate hikes by the Federal Reserve, suggesting economic growth could slow as credit contracts. financialpost
• The People's Bank of China held key lending rates steady in a move widely expected by markets, after cutting banks' reserve requirements last week. Central Banking
• Banks operating in Australia have conservative lending practices that reduce the potential for systemic risks arising from commercial property markets. Reserve Bank of Australia
• The Fed on Wednesday raised its forecast in 2024 for the U.S. central bank's overnight lending rate to 5.1%, but lifted its outlook for economic growth. Reuters
• Climate-related regulation on large banks in Brazil caused a shift in lending to high-emitting sectors from large to small banks, further increasing risks. OMFIF
• Cuts in lending rates have raised hopes that mortgage levels have peaked, despite the Bank of England raising interest rates. Evening Standard
• Recent action by the Federal Deposit Insurance Corporation to guarantee deposits, and by the Fed to lend to banks that require funds, should solve liquidity-related risks for US banks as well as for US branches of foreign banks. Insights
• Banks expect to further tighten their lending standards over the remainder of 2023, with some banks reporting concerns about their liquidity positions, deposit outflows, and funding costs. Board of Governors of the Federal Reserve System
• China's central bank is likely to cut lending rates further, but a reluctance to borrow among private companies and households means that continued policy easing could hurt banks that are already battling margin pressures. MalaysiaNow
• Interest rates on loans throughout the UK economy have increased dramatically, causing banks to be more cautious about who they lend to for fear of borrowers being unable to meet their debt obligations. CityAM
• Banks could tighten their belts on lending after three major regional bank failures stung the financial system earlier in 2023, another force leading to higher interest rates that could also make it harder to qualify for a loan. Bankrate.com
• Ongoing pressure could cause smaller banks to become more conservative about lending in order to preserve liquidity in case they need to meet depositor withdrawals, and a tightening in lending standards could weigh on aggregate demand. IG
• While the US central bank has embarked on an aggressive campaign of rate hikes, lifting the benchmark lending rate 10 times in a row since early last year, it is widely anticipated to pause this week. Digital Journal Inc

Last updated: 19 November 2024