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I need help about 4 article about finance after reading Wall Street Journal from 8/21/2017-8/27/2017
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Banks Send Warning Signs for Economy
The article “Banks Send Warning Signs for Economy” by Aaron Back states that the US banks
are taking long time for the expansion. Banking sector is considered as a real health of overall
economy. The growth of banking sector was excellent in past few years, but now the momentum
is very slow. The Federal Deposit Insurance Corp. (FDIC) has reported total loans and leases rise
by only 3.7 percent after the end of second quarter. The decrease in the value is consecutive for
third quarter and total decrease is by 6.7 percent compared to previous year.
Martin Gruenberg, Chairman FDIC, stated that the slowdown of the economy is in its ninth year
of expansion. The slower lending growth of banks means less money for investment in business
and personal use. The strong reason considered for slow lending is that lenders have to pay the
amount back, as indebtedness rise and bills become due. For every borrowed amount, bills turns
out to be due after a certain period of time. The trend is common among the customers. Credit
card Charge-offs decreased by 24.5 percent in the second quarter, this means less spending by
the people for personal use. Credit card is the most preferred source of payment among the US
citizens. Due to its benefit like cash back offers, it is preferred over cash payment. Because of
slow charge-offs, the interest gained on credit cards by banks has decreased. There has been fall
in charge-offs loans to industrial and commercial borrowers by 9.7 percent.
Despite all these downfalls, banks are trying to recover from this deceleration. Almost 5,800
banks and financial savings institutions have reported $48.3 billion net profit in the second
quarter, as reported by FDIC. This has shown an upward trend of 10.7 percent. Thi...