Wells Fargo & Co (WFC), Citigroup Inc (C), Bank of America Corp (BAC): A Jaw-Dropping Subsidy for the Biggest Banks

But, the banks aren’t lending. Loan-to-deposit ratios at some of the nation’s biggest banks reveal that loan activity dropped between the fourth quarter of 2011 and the last quarter of 2012. Overall, the average of the top eight banks — where a larger number indicates more loans — dipped to 84% from 87% just a year earlier.

While Wells Fargo & Co (NYSE:WFC) and U.S. Bancorp hadn’t reduced their lending over that year, Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), and JPMorgan Chase & Co. (NYSE:JPM) were found to have cut back on lending during that time period. JPMorgan Chase & Co. (NYSE:JPM) was the lowest at 61%, with Citi coming in at 70%. B of A was higher, at 84%, though the ratio one year earlier was 92%. Wells stayed at 84%, and U.S. Bancorp was the winner, with a loan-to-deposit ratio of 90%.

While some heavy hitters such as former Fed Vice Chair Alan Blinder have strongly suggested chipping away at this lucrative scenario in order to push banks to lend, it is unclear whether doing so would have a detrimental effect on the economy. Meanwhile, the benefits of being a big bank just keep piling up.

The article A Jaw-Dropping Subsidy for the Biggest Banks originally appeared on Fool.com.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Related tickers: Wells Fargo & Co (NYSE:WFC), Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC)