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Bankers cautious on new lending.

A nationwide survey by Grant Thornton of 600 senior banking executives at the end of the first quarter of 1992 found bankers pessimistic about a surge in new-loan volume in 1992. Only 31% reported a year-to-year increase in loan volume for the first quarter of 1992, with 30% reporting lower volume. Loan volume for the remaining 39% equaled that of last year.

Looking ahead, only 20% of the bankers polled expected a rise in commercial and industrial loan volume in the 12 months ending March 31, 1993. Another 38% forecast a drop in commercial and industrial loans for the period, while 42% anticipated no change.

An ongoing credit crunch in the United States, defined in the survey as an inability or unwillingness to make loans to qualified borrowers at reasonable prices and terms, was acknowledged by 38% of those polled. Another 11% said a credit crunch had existed but was over by the survey date. However, 51% of the bankers denied a credit crunch had ever existed.

To a large extent, the bankers' views on a credit crunch appeared to be colored by the state of the industry in their area. In the Northeast, where the banking system is in turmoil, 67% of the bankers agreed a credit crunch existed. In the Midwest, where banking problems were held to a minimum, 71% disputed the existence of a credit crunch.
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jul 1, 1992
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