The Big International Banks

Recently by Robert Wenzel: Whatcha Gonna Do When They Come for You (and They Are on Steroids)?

An EPJ reader writes:

I met you, briefly, in Boston during the Murphy-Wenzel lectures at the Omni Parker…

Confidentially, by way of background, I manage all aspects of funding for a large commercial finance company… I have been extremely active in the wholesale capital and securitization markets for the past 10 years raising well over $2 Billion of structured debt credit facilities, securitizations and warehouses. Consequently, I have a great vantage point to observe the anecdotal behavior of the global money center banks. From 2004 through most of 2007 these shops were throwing money at their clients. That approach to lending ceased in mid-to-late 2007 and the wholesale funding and securitization markets remained relatively dormant until early 2010.

I firmly believed this was going to continue and that the memory of 2007-2008 would remain planted in bankers minds. I also expected a long period of deflation as a result. However, what I am observing presently is that the TBTFs are becoming much more aggressive in their pitches to clients and offering substantially better credit terms and rates on debt facilities. It appears the excess reserves are [slowly] starting to flow from the money centers to targeted segments of the economy.

Whether this continues is anyones guess.

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2011 Economic Policy Journal