Bank lending drops again in February

The data is out, and the Canadian banking fraternity lightened up their collective business loan book by another $2 billion in February 2009. The total quantum of Canadian Chartered bank business loans to Canadian corporations was $183.7 billion, down about 1% from $185.8 billion in January.

The peak of bank lending came in December, when the aggregate outstanding figure touched $191.6 billion. It is now just a snick above the level it was last August.

The question is, how will Finance Minister Flaherty take the drop? A $5.8 billion decrease in two months. A sum of business fuel that neither the BDC or the EDC can replace, no matter how much capital the Feds throw their way.

It is odd that the Federal government isn’t involving ALL private sector players in dealing with the problem of a lack of sufficient business credit…just the banks.

MRM