So far this year Bank lending in the US has slide at the drastic rate. This rate of fall was the fastest in recorded history. So it is raising concerns for the Federal Reserve. Now it has been apprehended that emergency stimulus may have been withdrawn by the reserve.
Lending has fallen by over $100bn (£63.8bn) since January as per David Rosenberg from Gluskin Sheff. And this has been plummeting at an annual rate of 16pc. According to Rosenberg, the credit crisis has began, so $740bn of bank credit has been evaporated. Hence a record 10pc decline has been encountered.
In such a critical situation the Fed has to turn off the monetary spigot. So any talk of an exit strategy premature is possible as the banking sector balance sheets shrinking in renders.
Continued losses and Demands for higher capital ratios from the credit crisis are both causing banks to cut lending, said by Tim Congdon from International Monetary Research. So the risk of a double-dip recession is growing by the day. The situation may be worse than this recession apprehended by Tim.