>> Financial Management
Since the 2008-2011 financial crises, banks have become leery of lending to consumers. There has been much research completed on this subject and the blame has been a subject of much controversy. Fast-forward to 2013 and 2014. Has anything changed in the banking industry to open the lending activity?
Has there been any new legislation passed to encourage banks to lend? How about consumer protection legislation? Research this issue using several scholarly articles to use as References as to please cite according to APA citation requirements. 1,5 pages plus references.
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Since the onset of the financial crisis of 2007-08 the FED have continuously discouraged the banking sector from lending to the retail institutions like individuals which was aimed at reducing the inflationary trend but this has widened the unemployment in the economy. Because of this the reserves in the banking system has increased tremendously from a $40bn in 2007 (excess reserves were to the tune of $15bn) to almost a trillion dollars in 2012. Of this a net amount of $90 billion is regarded as excess reserves in 2011-12. This was unprecedented not in terms of size only but in terms scale as it has never happened before. (Mankiw, 2012)