Banks are hesitant to extend credit due to inverted yield curve and recessionary pressures.

Total bank credit is lower than last year.

Deposits decline, forcing banks to replace low-cost funding with higher-cost borrowings.

Banks shed securities and reduce loan originations, particularly in business and real estate.

If trend continues, banks will contract loan portfolios, impacting the economy. Challenges for banks to grow and extend credit due to declining deposits and unprofitable interest rate environment.

Banks create money. few loans means deflationary, No loans means deflation.

#BankingCrisis #CreditContraction #EconomicImpact