WASHINGTON Banking conditions continue to improve in most regions around the country, despite some negative economic circumstances in other sectors, according to a Federal Reserve Board report released Wednesday.
The central banks Beige Book a summary of economic conditions as observed by each of the 12 regional Fed banks over the past 6 weeks said that the economy continued to expand across most regions fueled at least in part by greater consumer spending spurred by lower energy prices.
Demand for credit was up in the Philadelphia, Cleveland, Richmond St. Louis, Kansas City, Dallas and San Francisco, the report said, and demand for commercial and industrial loans was up moderately in New York, Philadelphia, Cleveland and Chicago. Banks in the New York and Cleveland regions noted an increase in deposit rates and a decrease in loan delinquency across all loan types, especially residential mortgages, according to the report.
The Chicago Fed noted that credit spreads and market volatility reduced in the most recent reporting period, while the San Francisco Fed said that some banks have raised interest rates on certain loans in order to keep pace with growing demand. Auto lending appeared to be one of the main sources of consumer lending growth nationwide.
The mild boost in demand for banking services comes as other economic sectors face considerable headwinds, particularly the agricultural and energy sectors. Excess rain in some regions and drought in others has caused problems for the spring planting season, the report says, while food commodity prices remain low because of high levels of stored grains and lower exports, owing to the strong dollar. The energy sector also continues to contract, resulting in lower levels of commercial and industrial loans for energy extraction and infrastructure projects.