Assessing the Current State of Banking Amidst Turmoil and Risk

Despite recent banking turmoil, there is no evidence of a lending crisis yet. The Federal Reserve has been actively working to cool the economy with tighter financial conditions, which means lending activity has already been tightening and further tightening was to be expected. Banks tightened standards for commercial and industrial loans, commercial real estate loans, residential mortgage loans, and consumer loans. However, the magnitude of the change does not appear to reflect the kind of deterioration you might expect from a banking crisis.