Asset Based Loan

Bernanke – Bankers say Supervision stifles lending

Speaking at the May 10th, 2012, 48th conference on Banking and competition, Federal Reserve Chairman Ben S. Bernanke expressed that some bankers and businesses believe that increase Federal Supervision has made expansion of lending more difficult.

Bernanke stated further that the Federal Reserve takes seriously that it’s responsibility to insure the safety and soundness of banks does not unintentionally constrain lending to creditworthy borrowers. ¬† The federal reserve has taken steps to address these concerns.

The chairman has instructed federal supervisors to promptly increase a bank’s supervisory rating when prompted by a sustainable improvement in it’s condition and risk management.

Analysis by the Federal Reserve has indicated that all things being equal,  banks with lower supervisory ratings tend to lend less.