Was The Plunge In US Banking Lending An Optical Illusion?

Was America's much-hyped "credit crunch" a mirage? As most regular readers will recall, Fed data covering the week to March 29 showed a second consecutive large contraction in bank lending, concentrated in C&I and CRE. The figures made sense in the context of recent "banking developments" (to employ the language used nearly a dozen times in the March FOMC minutes) and served as the basis for many a dire-sounding headline, including the one I used while editorializing around the numbers. B