US bank loans and leases are slowing, yet The Federal Reserve has helped keep their stock values elevated thanks to the extraordinary monetary stimulus.
(Bloomberg) — U.S. banks’ loans and leases dropped to 47.15% of total assets in the week to Sept. 1 from 47.24% the week before, according to the Fed
Total assets increased to $22.19 trillion from $22.10 trillion
The share of safe assets — virtually riskless investments such as cash, Treasuries, and securities effectively guaranteed by the U.S. government — increased to 51.2% of total assets from 51.0%
Loans and leases as a percentage of deposits were unchanged at 59.7%
Cash was the highest as a percentage of total assets since January 2015
Residential real-estate loans hit a historic low as a percentage of total assets at 10.0%
Commercial real-estate loans were the lowest as a percentage of total assets since August 2015
Consumer loans were the lowest as a percentage of total assets since May
Commercial and industrial loans were the lowest as a percentage of total assets since June 2012
Only in this deranged, hyper-stimulated market can bank stocks be soaring despite slowing loan and lease growth.