U.S. bank lending drops in February despite bailouts: report

(Reuters) - Banks that received the most U.S. government aid made or refinanced 23 percent less in new loans in February, than in October 2008, when the U.S. Treasury launched its Troubled Asset Relief Program, the Wall Street Journal said, citing its own analysis of Treasury Department data.

In three of the four months that the U.S. government reported this data, the total dollar amount of new loans declined, according to the paper.

Some 16 of the 19 largest TARP recipients with comparable data originated fewer loans in February than they did at the time they received federal infusions, the paper said.

The Treasury has not released its own tally of the October to February decline, according to the paper.

"No one metric can accurately capture lending activity across the nation," a Treasury spokesman told the paper. "That's why we provide the data set in full."

"The declining levels of lending obviously reflect current economic conditions," the paper cited the spokesman as saying. "But Treasury firmly believes that lending levels would be much lower" without the government's capital injections.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by David Fox)