Banks Are Lending Longer

According to a new report from the FDIC, banks are loading up on a record amount of loans that carry low rates for long periods. The percentage of bank assets that won’t mature or change rates for more than five years reached a new high in the second quarter.

Across all banks, the percentage of total assets that are at a fixed rate for more than five years was 27.5 percent in the second quarter of 2017. That's the highest that figure has been since the FDIC started tracking it in 1984. The measure reached 33.7 percent in the second quarter at larger banks, those with $1 billion to $10 billion in assets.

That means banks are allowing more borrowers to lock in low rates for long periods. That's a potential risk to the banks should rates move sharply higher, so it seems to be signaling that they expect rates to stay low for quite some time.