Tighter bank lending prompted by the recent failure of two midsize American banks will slow U.S. economic growth this year, the International Monetary Fund estimated, warning that rising interest rates pose a threat to the global financial system.
U.S. banks’ lending capacity will decline by 1% this year due to the fall in the value of many bank stocks as investors reassess the health of midsize banks, the IMF said in a report on global financial stability released Tuesday. That reduction in lending is expected to shave 0.44 percentage point off U.S. gross domestic product in 2023, the multilateral financial organization said.
