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To: Softechie who wrote (1925)	2/28/2002 2:05:41 PM
From: Softechie	Read Replies (1) \| Respond to of 2155

FDIC's Powell: US Not In Credit Crunch DOW JONES NEWSWIRES WASHINGTON -- The U.S. isn't experiencing a credit crunch as there continues to be money available, Federal Deposit Insurance Corporation Chairman Donald Powell said Thursday. "Institutions are willing to loan money. Interest rates are lower than they've been in the last 30 years," Powell said, answering questions from reporters during a briefing on the FDIC's report of banks' fourth-quarter earnings. Powell and other FDIC officials at the briefing cited a number of bank industry indicators showing that credit is continuing to expand and that banks have ample deposits to fund new loans. When asked what indicators he would track to indicate whether the U.S. is, in fact, in a credit crunch, Powell cited the loan deposit ratio. This ratio measures to what extent traditional funding, such as deposits, is available to fund a loan. A lower ratio indicates a bank has sufficient deposits to fund new lending activity and a higher loan-to-deposit ratio shows the bank may have more trouble funding loans. "Banks aren't restrained by a lack of ability to fund new loans because deposits have been flowing in at a very high rate, so banks have lendable funds, and for most institutions, as we've pointed out, there aren't real credit quality problems," said Ross Waldrop, a senior financial analyst at the FDIC. Don Inscoe, associate director of the FDIC's statistics branch, said the fourth quarter was the fifth straight quarter in which banks' ability to fund new loans outstripped loan growth. Officials also cited recent FDIC research showing that while banks' commercial and industrial loan activity slowed sharply last year, commercial credit outstanding from all sources continued to grow in real terms. In that report, the FDIC said the current credit market environment is more favorable than it has been in past recessions. Updated February 28, 2002 12:27 p.m. EST