Yahoo Finance | April 14, 2023
(Bloomberg) — Not long before the Federal Reserve began lifting interest rates to tamp down inflation, regional banks across the US reported a surge in lending to a group of well-connected people: their own directors, officers and major shareholders.
The trend continued through all of last year, reaching almost $10 billion by the end of 2022, according to a Bloomberg News analysis of data submitted to federal regulators. That was 12% more than a year earlier and represented the largest annual jump in lending to insiders, along with their related interests, in at least a decade.
What’s more, some of the biggest increases were at firms that have recently failed, or are now struggling amid the worst banking crisis since 2008. Among the regional banks that said they more than doubled the amount of credit to insiders last year were Silicon Valley Bank, Western Alliance Bank and First Republic Bank.
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