Biden Admin Strikes Again, US Banking Sees Largest Slump Since 1973

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The Biden Administration has been touting their economic success, claiming that their policies have resulted in thefastest, strongest, most equitable recovery in American history. However, the American banking system is seeing a historic contraction, more significant than what was seen during the 2008 financial crisis. According to the Federal Reserve, commercial bank lending dropped by nearly $105 billion in the two weeks ending March 29th.

The most recent report published on Friday indicated that commercial bank deposits also experienced a decline of $64.7 billion in the past week, marking the tenth consecutive decrease. This is primarily driven by a drop in large firms deposits and real estate, commercial and industrial loan reductions. This is the largest drop on record since 1973, surpassing the financial crisis of 2008. 

The failures of Silicon Valley Bank and Credit Suisse have also complicated the Federal Reserves efforts to curb inflation without tipping the economy into recession. As a result, the American Bankers Associations index of credit conditions has dropped to its lowest level since the start of the pandemic. This will likely cause banks to become even more strict with lending, making it harder for people to secure credit.

Furthermore, small businesses throughout the country are now filing for bankruptcy at a record pace, exceeding the levels observed in 2020 at the height of the coronavirus pandemic. JPMorgan Chase & Co.s CEO, Jamie Dimon, believes the crisis may push the economy into recession, yet the Biden Administration continues to downplay the gravity of the situation.

The Biden Administration has yet to fully recognize the current economic conditions nor even really address them properly. His policies have not addressed the issues in the American banking system and it’s paving the way to a slippery slope into recession.

It would be awesome to see Biden develop policies that will help address the banking crisis, support small businesses, and promote economic growth.