"New England lenders retain good ratings; Boston Fed chief tells congressional panel credit tighter" by Robert Gavin, Globe Staff | March 24, 2009
New England banks are in better shape than their counterparts nationally, but have probably made it tougher to borrow as the worsening economy makes it riskier to lend, said Eric Rosengren, president of the Federal Reserve Bank of Boston.
Testifying at a congressional hearing in Boston yesterday, Rosengren said New England has a much smaller share of banks with low ratings from regulators than the nation as a whole. The ratings, which assess banks' financial conditions, consider factors such as loan quality, earnings, and capital. In addition, the share of banks with low ratings in New England remained steady, at less than 6 percent from the end of 2007 to the end of 2008, even as the share of such banks nationally doubled to about 13 percent.
"The good news locally is that a greater share of New England banks are in good health and thus more able to supply credit to businesses," Rosengren said. "Of course, most anecdotal indications are that even among healthy banks willing to lend to creditworthy borrowers, standards have probably tightened in response to the riskier environment."
Rosengren testified in the State House before the US House Financial Services Committee, which was examining the availability of credit for small and midsize businesses in Massachusetts. Rosengren described the variety of initiatives undertaken by the Federal Reserve to increase the flow of credit. Under one recently launched program, for example, the Fed is lending money to banks and taking as collateral highly rated securities backed by consumer and business loans.
The idea is to pump into banks money that could be used to make consumer and business loans. Investors, fearful of increasing defaults, have been reluctant to buy these loan-backed securities, cutting off a source of money for new lending. The Fed program "should help make credit more available for student loans, consumer credit, commercial real estate, and small business loans," Rosengren said, "leading to lower borrowing rates and improved access in the market for consumer and small business credit."
--more--"Seriously, readers, have you had it with the Fed liars and their MSM mouthpieces?
I sure have.
