The Depositories are more or less tapped out...
Total Assets of Banks already up to nearly $20T at $19,700B.... Residual $2,040B... this ratio now down to 10.3% from 11.2% back in January...
They're going to have to start to accrue additional Residual for a while to get this % stabilized...
The baton is going to have to be passed over to Fiscal Policy at this point...
From Tuesday, customers applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20% of the home's value.
The change highlights how banks are quickly shifting gears to respond to the darkening U.S. economic outlook and stress in the housing market, after measures to contain the virus put 16 million people out of work and plunged the country into recession.
"Due to the economic uncertainty, we are making temporary changes that will allow us to more closely focus on serving our existing customers," Amy Bonitatibus, chief marketing officer for JPMorgan Chase's home lending business, told Reuters.
JPM Chase (largest US lender) raising mortgage borrowing standards - as of next Tues., borrowers now need 20% down + a 700 FICO to qualify for a mortgage. No Bueno Housing prices ⬇️ it’s slowly, then suddenly! https://t.co/i9KjoYvaYu— Vic Turbendian (@Vic_Turbendian) April 12, 2020
Dimon is hunkering down for a siege:
Jamie Dimon expects fallout from the coronavirus pandemic to include a major economic downturn and stress similar to the 2008 financial crisis https://t.co/vj0Dwn2cuH
— Bloomberg Economics (@economics) April 12, 2020
5 comments:
"We are making temporary changes that will allow us to more closely focus on serving our existing customers".
How very worthy, generous, and self-sacrificing of them. I'm writing to the Pope to suggest Jamie Dimon be made a saint....:-)
Ralph, They have pretty much run out of any authority to increase lending...
They are regulated to have a maximum amount of Assets... they are pretty much there...
Gotta end banking as the primary money conduit to the economy. Enough is enough.
What are the alternatives?
Fiscal... direct subsidies... basic income ... etc....
Banks are regulated fiscal agents of the government...
They are regulated to have a maximum amount of assets in USDs...
So if the proposed govt response requires USD flows that will result in balances in excess of what the fiscal agents are permitted to possess then you have to think of something else... or change the regulations...
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