Are Banks cutting Back on lending

This probably belongs better in a PF or Economics blog but most are US based.

I was reading an article (link below) about how banks in the US are not only not lending to each other but there not lending to small or large business either causing no end of problems for businesses. At first it was hard to people with bad credit to get a cheap lease, then it was hard for any period to get a lease or car loan. The next step was banks have pretty much stopped lending all together.

I know banks in Spain are demanding realistic appraisals on mortgages but they still seem to be lending. Have you heard of any stories about people business with very good credit being turned away?


http://www.latimes.com/news/nationworld/nation/la-fi-credit2-2008oct02,0,2293926.story?page=2

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Not sure i understand the question Rob but certainly for mortgages credit rating is not the most important factor here in Spain. It is more a question of can people service the debts they have already and can they service any new obligations they are looking to take on within the lenders debt to income ratio. Without doubt for non residents some of the lenders are unwilling to be as open minded as they were to a Ltd Co director having retained profits within their company accounts - thus company income that they could take but choose not to as it would open them up to higher taxation - thus many only take what they need to live on and leave the rest in the company and is itemised retained profits. Many banks were willing to incorporate that as income - it has become harder to persuade them that is the case. It has certainly become harder to argue the merits of an acceptance than it was.

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