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Lending Slow, but Small Banks Stable

Banks are potentially more cautious to give out loans after the collapse of Silicon Valley Bank and Signature Bank

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  • Written by  Banking Exchange staff
 
 
Lending Slow, but Small Banks Stable

Despite a slower housing and lending market, the Federal Reserve still seems determined to raise interest rates next week.

Banks are potentially more cautious to give out loans after the collapse of Silicon Valley Bank and Signature Bank last month, but the Federal Reserve is still battling inflation, which should keep interest rates rising at least for the short term.

The good news for small banks is that after the initial outflow to larger financial institutions, small and midsize banks have stabilized and there are less concerns over future outflows for the time being.

Banks also reported that customers have not expressed panic that would raise concerns over a credit collapse.

Wall Street expects a quarter point interest the first week in May bringing the benchmark interest rate to about 5%. If the Federal Reserve raises rates even more, that could raise concerns that inflation is still a major concern.

The United States, however, could be reaching the end of the interest rate hikes very soon, according to most Wall Street experts.

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