The One-Chart Summary Of All That Is Wrong With The US Financial System: Deposits Over Loans

Posted on November 15, 2020Comments Off on The One-Chart Summary Of All That Is Wrong With The US Financial System: Deposits Over Loans

Now that the big banks have concluded their earnings season, with the top highlight being the collapse in loan loss reserve builds from $33 billion in Q2 to just $5 billion in the quarter ended Sept 30..

… in what some have taken as a vote of confidence for the economy as bank risk managers clearly don’t anticipate another sharp leg lower in the economy (that may change if a second wave of covid forces new shutdowns), we can take a closer look at some of the other, just as notable observations within the US financial sector.

First, we looked at the amount of total loans across the 4 megabanks, where for the second consecutive quarter aggregate loans declined after the Q1 surge (which as a reminder was driven almost entirely by revolver drawdowns, which have since been refinanced by bonds and other debt instruments).

Comments Off on The One-Chart Summary Of All That Is Wrong With The US Financial System: Deposits Over Loans