reports on a common problem that banks are experiencing: not enough loan demand:
Conditions are increasingly ripe for banks to start producing big lending profits. There is only one catch: They can't make enough loans.
If they can't make loans, they just park the money in investments like T-bills. There's no incentive to attract deposits in this environment.
With sluggish demand for new loans, bankers have been parking unused deposits and borrowings in investments. According to Fed data, banks' securities portfolios rose 11.3% to $2 trillion in November from a year earlier. Government agency bonds, such as Treasurys and mortgage-backed securities churned out by Fannie Mae, have been the dominant investment choice of bankers.