wealthwire.com / by Adam English / Monday, February 4th, 2013
There is no doubt in anyone’s mind that big banks fueled the global recession and destruction of middle class wealth. Now JPMorgan Chase asset management economist Michael Cembalest has attempted to whitewash big bank’s pitiful role in the credit crunch that has hampered the recovery.
On January 29th, this note was released by Mr. Cembalest through JPMorgan. Even through the bank crisis and recession are long over, business lending has remained at incredibly low levels even as “too big to fail” banks received federal protection through massive preferential bailouts designed to loosen credit and build up capital reserves.
It is clear from reading his analysis that Mr. Cembalest had no intention of biting the hand that feeds him while looking at the role big banks have in the problem.
Here is the chart that depicts ‘credit extended’ that is normalized at 12.5% of risk weighted assets to remove the effect of varying degrees of leverage against top tier capital reserves, like cash and Treasuries:
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