IPC International Community magazine an association member publication
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IPC COMMUNITY 15 SUMMER 2023 third of total bank credit. But small banks are 54% of all real estate loans, 67% of all commer- cial real estate loans, and 71% of construction and land development loans. Small banks are about 27% of all C&I loans. The Impact on the Electronics Industry The ongoing banking crisis will have both immediate and long-term consequences for the electronics industry. In the short term, lending costs will be higher and lend- ing requirements more arduous. During credit crunches, banks raise lending standards, which not only makes it more difficult for businesses to get loans but can make it difficult for businesses to refinance loans that are coming due. As the FDIC and the Fed- eral Reserve reevaluate financial system oversight in response to the bank- ing crisis, it is likely that there will be increased supervision and regula- tion imposed on the bank- ing sector. While this is intended to enhance sta- bility and prevent future crises, it can inadvertently impact the electronics industry. Increased regu- lation often translates to higher compliance costs for banks, which can be passed on to borrowers in the form of higher lending costs and reduced lending capacity. Furthermore, the poten- tial consolidation of banks resulting from these reg- ulatory changes can have far-reaching impli- cations for the electronics industry. Larger banks may prioritize lending to more estab- lished and financially secure companies, making it even more challenging for small- and medium-sized electronics businesses to access necessary funding. This could lead to a concentration of resources and power in the hands of a few major players, potentially sti- fling competition and limiting opportunities for smaller enterprises. Commercial and industrial loans, all commercial banks, seasonally adjusted, 12wk change, $B. Commercial and industrial loans, small domestically chartered commercial banks, seasonally adjusted, 12wk change, $B. IPC COMMUNITY 15 SUMMER 2023