We Need QE Because Credit Is Still Crunched

Here's another reason we need Ben Bernanke's QE3: Lending remains weak.

In the most recent quarter bank deposits grew twice as fast as loans, according to a report from bank research firm SNL Financial, which looked at U.S. lending capacity. Banks typically make money by paying a low interest rate for deposits, and then lending that money out at higher rates to businesses or home buyers. Banks, though, still appear to be hanging onto more of those deposits than they usually do. The report shows that while the credit crunch may still be over, the hangover remains.