Bank Commercial Lending An Endangered Species?

“What gives with the banks?” questions Karen Shaw Petrou, a managing partner at Federal Financial Analytics. In prepared remarks to the Loan Syndications and Trading Association’s 19^th annual conference today, Petrou expresses concerns that lending to small and mid-market businesses – once a key anchor of a bank’s responsibility – might be fading away from the bank’s to do list, particularly when the going gets tough.

Bank-centric rules redefining commercial lending

“Banks are officially called commercial banks because of the critical nature of lending to small, medium, and large companies, but recent market trends accelerated by bank-centric rules are redefining the sector,” she concludes. In other words, the bank’s role primarily as a lender has given way to yield...