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The buck stops here? :-)

Four of the top five banks are apparently taking a “banker’s holiday,” from lending.

According to the Federal Deposit Insurance Corporation (FDIC), deposits at the top five bank holding companies climbed 29% in the year ended June 30. Of course, some of these banks operate in California. Of the top five, only PNC of Pittsburgh, PA has boosted its LENDING by the same magnitude. At three of the others (Bank of America, JPMorgan Chase, and Wells Fargo), the growth in loans trailed the growth in deposits by large margins. (Note added November 22, 2009: I almost “hurled” :-) during a recent TV commercial by one of these three banks that depicted how many homeowners they had saved from losing their homes during the recent recession. How many homeowners could they have “saved” if their loans had kept pace with their RECEIPTS, instead of their clinging tightly to the money? Precursors of another of these banks were reported by the BBC as having alleged involvement with actions [1, 2, 3] supporting the Nazis during World War II. Although WWII was a long time ago, I don’t think that I will find it in my heart to forgive and forget.) The bank that has received the most federal aid since the meltdown of September 2008, Citigroup, reported a DECREASE in lending, despite its increasing pool of assets!

Ebeneezer Scrooge, a banker himself, would be proud! :-) (Note added November 22,  2009: … of the cash flow. I don’t think that Scrooge would have been involved with the Nazis.)

The mind-boggling bar and pie charts are in the Fortune article. The loan portfolios of the five largest deposit-taking banks rose by $564 billion last year, but their core deposits (checking and savings accounts of less than $100,000) climbed by $852 billion! These five banks received more than $100 billion in direct taxpayer assistance via the Troubled Asset Relief Program (TARP), which was set up to replenish depleted capital of banks and allow them to increase lending to consumers and small business.

The top five banking firms now control 37% of the deposits in the United States. You can read about the acquisitions made by these banks in the last year, and you can read the comments of two that bothered to respond to Fortune.

-Bill at Cheshire Cat Photo™

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