On the Eve of Brexit, U.S. Banks Are Set to Conquer Europe

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■ December 13, 2018, 12:01 AM EST

On the Eve of Brexit, U.S. Banks Are Set to Conquer Europe

● Exit Britain. Enter Wall Street.

By Edward Robinson, Lananh Nguyen and Yalman Onaran

With Donald Trump rattling the international order Washington built after World War II, engagement is out and isolationism is in. Yet Wall Street, an expression of American influence every bit as defining as Hollywood or Silicon Valley, apparently didn’t get the memo.

European finance—whipsawed by debt crises and political upheaval since the financial crash of 2008 and now on the verge of the Brexit trauma—is seeing just how internationalist American banks are. U.S. financial powerhouses such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. have been running up the score on their European rivals, dominating investment banking overseas as never before.

The U.K.’s separation from the European Union will cleave Europe’s financial industry in half. London’s diminished role as the financial gateway to the Continent may prevent Europe from matching the U.S. with its own deep, seamless flow of capital. Brian Moynihan, the chairman and chief executive officer of Bank of America Corp., calls this effect “disaggregating liquidity.”

“That’s not going to be good for the economy,” Moynihan said at an industry conference in Boston in November. “It puts them back about 10 to 15 years in the possible development of capital markets, which is critical to a country’s success. At the end of the day, what makes the U.S. powerful is our capital markets and all the capital we can bring to the situation. That just allows us to develop wealth faster for people, and companies can access the capital a lot faster.”

The result: Wall Street’s deepening penetration into the EU. Bank of America is turning a post office in the center of Paris into a trading floor for hundreds. Goldman Sachs, Morgan Stanley, and JPMorgan are shifting capital and staff to Frankfurt, Paris, and possibly other locales. JPMorgan Chase Chairman Jamie Dimon and his peers are increasingly signing up clients for work at the expense of homegrown rivals such as Deutsche Bank AG and BNP Paribas SA. In January, for instance, JPMorgan, Morgan Stanley, and Lazard advised Belgian drugmaker Ablynx and Paris-based Sanofi on a $4 billion takeover that featured no involvement by a European investment bank. This year, five of the six top institutions handling European transactions worth $500 million to $6 billion were American, according to data compiled by Bloomberg.

It’s possible the contest between U.S. and European investment banking will shift again. In the precrisis decade, European institutions were making inroads into the new world. UBS Group AG built an airplane hangar-size trading floor in Stamford, Conn., and Barclays, Deutsche Bank, and Credit Suisse elbowed into the upper ranks for securities underwriting and mergers advice in the U.S. In 2010, top European banks raked in 51 percent of global revenue from trading equities, compared with 44 percent for American lenders.

The UBS trading floor is no more, and Deutsche Bank is the latest European bank retreating from the U.S. In equities trading this year, Wall Street commands 60 percent of global revenue, compared with Europe’s 34 percent, according to data compiled by Bloomberg. The top five U.S. investment banks earned $75 billion in the first nine months of 2018, a quarter more than the same period last year. In contrast, Deutsche Bank, which has been hobbled by CEO turnover and a round of money laundering cases, saw its shares fall to record lows in December. BNP Paribas, France’s No. 1 bank, jolted investors in the third quarter when it reported a 15 percent drop in revenue in fixed income, long considered one of its strongest businesses.

Even before Brexit, Europe struggled to overcome obstacles that would make its lenders more competitive. Brussels’ bid to unify its member states’ banking industries, for example, has foundered. “The fact that European politicians failed to produce banking union is a travesty,” says Barrington Pitt Miller, a portfolio manager with Janus Henderson Group Plc, which holds big stakes in European lenders. “If you’re a U.S. capital markets bank, you are looking at a free runway to step in and take market share.”

As if that weren’t enough, Dimon and Moynihan and their fellow Americans are riding a tailwind courtesy of the U.S. Federal Reserve—a surge in lending revenue. Over the last eight quarters, the Fed has lifted its benchmark interest rate to a range from 2 percent to 2.25 percent, which means banks can charge more for loans. The European Central Bank, nursing a fragile regional economy, has stood fast with a subzero rate. “There’s strong lending growth coming from companies in the U.S.,” says Jan Schildbach, head of research on banking, financial markets, and regulation at Deutsche Bank. “In Europe there’s only modest lending volume growth after years of contraction.”

Wall Street is doing well in Asia, too. U.S. banks take the five top spots in Asian equities underwriting, according to Bloomberg data. In the global business of trading securities, only one Asian lender, Japan’s Nomura Bank Holdings Inc., makes the top 16, with just a 1.7 percent share. In mergers and acquisitions, Asian institutions tend to show up in deals on their own turf. The Bank of China Ltd., for example, leads yuan bond underwriting.

It’s tempting for European banks to conflate the financial industry with the other sources of U.S. economic influence. The dollar continues to be the world’s reserve currency, and the U.S. Department of the Treasury has stepped up its role as a global financial cop—whether on trade with pariah states, policing money laundering, or enforcing tax laws. Foreign bankers and lawmakers bristle at what they call the “weaponization” of the dollar—how its dominance makes it harder for other countries to borrow and trade—and fear that Washington is indirectly giving Wall Street a boost by fining overseas banks billions of dollars.

The EU is starting to push back. Brussels was dismayed by the Trump administration’s withdrawal from the 2015 international agreement to curb Iran’s nuclear program and pursuit of penalties for companies that have renewed doing business with the oil-rich country. So Brussels is trying to cook up a way to get around the dollar-denominated economy to preserve commercial links with Iran.

Indeed, Trump’s willingness to undo long-standing accords on trade, security, and climate change has emboldened rival powers to challenge Washington’s reach. On Dec. 5 the EU unveiled an initiative to strengthen the euro as an alternative to the dollar by calling for companies in the financial and energy industries to denominate more trading contracts in the single currency. China is in its fifth year of rolling out its Belt and Road Initiative, a program worth hundreds of billions of dollars designed to project Beijing’s influence through myriad infrastructure and commercial ventures in dozens of nations in Africa, Asia, and Europe. Russian President Vladimir Putin, for his part, has called on nations to use their own currencies for international trade to blunt U.S. economic power.

Yet when it comes to Wall Street, the great game of geopolitics may ultimately amount to little more than noise. The industry, of course, has only one lodestar: money. And if a tectonic shift such as Brexit creates new opportunities, you can bet America’s big banks will grab a bigger share of business. Still, some fret about what will happen when the cycle turns. “The banks are never going to be terribly good at identifying what would cause them to fail,” says Paul Tucker, chairman of the Systemic Risk Council and former deputy governor of the Bank of England. “There will be a recession at some point, and people will lose money. The economy relies on these banks, and so they need to be able to withstand a lot of stress.”

Theoretical fears of some future downturn aren’t likely to put off Wall Street from making money today. And in the pursuit of profit, America’s global financial profile will grow only more prominent. “That old adage that the business of America is business is still true,” says Curtis Chin, the former U.S. ambassador to the Asian Development Bank and now an Asian Fellow at the Milken Institute. “Soft power comes in many forms.” —With Chitra Somayaji

To contact the authors of this story:
Edward Robinson in London at edrobinson@bloomberg.net
Lananh Nguyen in New York at lnguyen35@bloomberg.net
Yalman Onaran in New York at yonaran@bloomberg.net

To contact the editor responsible for this story:
Howard Chua-Eoan at hchuaeoan@bloomberg.net
James Hertling

BOTTOM LINE – American banks are establishing global hegemony as European institutions retrench even before London loses its place as the world’s financial capital.

The commodities bloodbath of 2015 in one chart

  

The commodities bloodbath of 2015 in one chartNOVEMBER 30, 2015 AT 11:27 AM

Business Insider / Jonathan Marino

Commodities have been getting creamed in 2015. 
And according to Jodie Gunzberg, global head of commodities at S&P Dow Jones Indices, it isn’t going to get any better any time soon.
“Unfortunately for commodities, there’s no waking up from this nightmare.”
So far, 2015 has not yet been the worst year for any single commodity, Gunzberg noted in a November 30 report, but there are a number of commodities that are on pace for one of their worst years on record. 

“Aluminum is having its second worst year in history and gold is having its sixth worst year in history,” Gunzberg writes. 

The S&P tracked each commodity’s performance back to 1970 for its research. No fewer than 17 are having one of the their five worst years out of 45.

Natural gas is down more than 40% this year, according to S&P, and energy is down more than 30% — making 2015 the fifth-worst year for each. 

Already, Wall Street is bracing for big fallout. Wall Street banks are expecting more defaults in the energy sector as they see more loans underperforming. 

Russia’s fast track to ruin DECEMBER 16, 2014 AT 1:26 AM BBC

Here are the numbers that explain why the Russian economy is imploding in the face of a tumbling oil price and Western sanctions.
Oil and gas energy represents two thirds of exports of around $530bn (£339bn). Without them, Russia would have a massive deficit on its trade and financial dealings with the rest of the world – which is why Russia’s central bank expects a capital outflow of well over $100bn this year and next.

And public expenditure is almost completely supported by energy-related revenues. In their absence, the government would be increasing its indebtedness by more than 10% a year, according to IMF data.

So the massive and unsustainable non-oil deficits in the public sector and trade explain why investors don’t want to touch the rouble with even the longest barge pole.
And Western sanctions, imposed to punish Putin for his Ukraine adventure, make it all the harder for Russia’s undersized non-oil economy to trade the country out of its mess.
Desperate government?

Little wonder then that the rouble has halved this year, more-or-less in line with the tumbling oil price.

That raises the spectre of rampant inflation – prices are already rising more than 9% a year on the backward-looking official measure.
And there is the twin nightmare of a fully fledged slump: Russia’s central bank expects the economy to contract not far off 5% next year.

But even so the decision of Russia’s central bank to raise its policy interest rate from 10.5% to 17% is eye-catching (ahem).
It might work to stem the rouble’s fall. Then again it could reinforce investors’ fears that the government is increasingly desperate and powerless in the face of a market tsunami.
Global ripples

Russia isn’t bust yet. In the middle of the year, it was projected by the IMF to hold reserves equivalent to about a year’s worth of imports. That will probably be down to nearer 10 months now, but provides some kind of cushion.

What does it mean for the rest of us? Well it doesn’t help that Russia is sucking demand from a global economy that is already looking a bit more ropey, as the eurozone stagnates and China slows.

As for the exposure of overseas banks – at $364bn, including guarantees – that is serious but not existentially threatening (and loans made by UK banks are just a few percentage points of that).

There are also about half a trillion dollars of Russian bonds trading, with about a third of those issued by the government. Most of those will be viewed by investors as junk, even if they are not officially classified as such by the rating agencies.

Or to pull it all together, Russia is massively leaking cash. And absent an entente with the West over Ukraine, which does not look imminent, it is challenging to see how the hole can be plugged.

Junk-Bond Worries Spread Beyond Oil A Pullback From Junk Bonds Can Be Harbinger That Risk Is Being Reassessed

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The oil bust is exposing cracks in the $1.3 trillion junk-bond market, putting pressure on a key source of corporate financing and potentially crimping economic growth.

U.S. junk-bond prices have fallen 8% since late June, according to data from Barclays PLC. One-third of that drop has come this month alone, putting the market on track for its worst annual performance since the financial crisis.

While much of the stress has been in the energy sector on the heels of the sharp decline in oil prices, lately the woe is spreading across the junk market.

Each of the 21 high-yield sectors in a U.S. junk-bond index tracked by J.P. Morgan Chase & Co. registered losses in the five days ended Dec. 9.

“Oil prices have crushed the energy sector and it’s leaking elsewhere,” said Andrew Herenstein, co-founder of Monarch Alternative Capital LP, which manages $5 billion and is among the largest investors in distressed debt.

Debt is generally deemed to be distressed when investors view it as at high risk of missing bond payments or of a restructuring, at least at some point.

A pullback from junk bonds is often a harbinger of a broader reassessment of risk across financial markets, raising the possibility that investors could turn more wary of stocks and other assets.

Skeptics warned earlier this year that the junk market was becoming overheated, pointing to the risk of a larger-than-expected retreat.

A raft of postcrisis rules have hit securities-dealing banks, hampering the ability of those middlemen to cushion a selloff, especially in risky assets. Many say the changing role of those dealers is exaggerating the price drops, raising the risk of indiscriminate selling, or “fire sales.”

“The problem with high yield is often that investors have to sell what they can, not what they want to,” said Peter Tchir, managing director at Brean Capital LLC, an investment bank and asset manager.

The junk selloff comes as investors are uneasy about the global economy and Federal Reserve interest-rate increases that many expect to begin next year.

Junk bonds, like stocks, have mostly proved resilient, bouncing back after modest pullbacks. Both these bonds, and stocks, could again resist a deep drop.

But some are betting this current junk-bond decline will deepen, if investors are caught off guard by a slowdown in growth, a corresponding rise in defaults and dealer difficulty in absorbing all the selling.

Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents.

Some investors worry the selling could feed on itself, sending up yields, stalling issuance and prompting restructurings or bankruptcies, analysts said.

Weakening demand for junk bonds has investors demanding a more generous yield to purchase these bonds rather than safer debt. Junk bonds now trade at a yield of 5.28 percentage points above yields of comparable U.S. Treasurys, up from 3.23 points at their June low for the year.

Investors’ “panicky logic” also includes some “nervousness” ahead of a meeting this week when the Fed may provide updated signals on interest rates, said Anthony Valeri, investment strategist at LPL Financial, which directly oversees or advises on $415 billion of assets.

U.S. high-yield bonds have returned just 0.78% this year, including price action and dividends, according to Barclays, putting the debt on track for its worst showing since 2008. Junk bonds returned 7.44% last year and 15.8% in 2012, Barclays said.

Since June, investors have yanked more than $22 billion from funds dedicated to junk bonds, according to fund tracker Lipper. Investors withdrew an additional $1.9 billion in the latest week ended Wednesday.

To be sure, the factors that have supported the junk-market rally since 2009 remain largely in place. The U.S. economy is growing, with job creation expanding last month at the fastest clip since the tech boom of the late 1990s, and interest rates and defaults remain low. Despite the issuance slowdown, financing remains broadly available and defaults are low.

What’s more, high-returning investments remain scarce amid low yields on safer bonds, meaning that many investors retain the “reach for yield” mentality that favors risk taking in income-generating securities.

“These bonds have been beaten up tremendously and they’re not all going to default,” said Brendan Dillon, senior investment manager at Aberdeen Asset Management Inc. Mr. Dillon said he has added 1% to 2% to the firm’s energy exposure within its high-yield funds because those bonds were oversold. Still, traders are scurrying to reposition.

Daily high-yield trading volumes earlier this month reached an average of $8.2 billion, said J.P. Morgan, just shy of their October record and up from the daily average of $5.6 billion in 2013.

Junk-bond issuance has slowed. Companies such as Dallas refiner Alon USA Energy Inc. have pulled deals. Units of casino and resorts operator Parq Holdings LP and food and beverage giant JBS USA also canceled planned bond sales this month, according to Leveraged Commentary & Data.

JBS didn’t respond to a request for comment. Parq had no comment.

Still, some see a buying opportunity at hand. Investors will “try to sell all or a lot of their energy holdings somewhat indiscriminately…and when the dust settles some investors have an opportunity,” said David Breazzano, chief investment officer at money manager DDJ Capital Management LLC, which oversees about $8 billion.

—Matt Wirz contributed to this article.

Write to Katy Burne at katy.burne@wsj.com, Gregory Zuckerman at gregory.zuckerman@wsj.com and Rob Copeland at rob.copeland@wsj.com

 

 

U.S. Regulator Flags Concerns About Growing Auto-Loan Market

 

WASHINGTON — A U.S. financial regulator is growing worried about increasingly risky practices in the auto-lending market, an area of growth for banks.

The Office of the Comptroller of the Currency, in a report released Wednesday, singled out concerns in the “indirect” auto lending market, in which banks buy up loans originated by car dealers. The regulator said it’s concerned about signs of loosening lending standards, including more loans to borrowers with weaker credit.

“These early signs of easing terms and increasing risk are noteworthy,” the banking regulator said.

Associated Press

Banks saw auto lending grow nearly 13% compared with a year earlier in the fourth quarter of last year and the OCC said it’s worried about growing losses in the industry. Average losses per vehicle have “risen substantially in the past two years.”

The average loss on a defaulted auto loan rose to more than $8,500 in the first quarter of this year, compared with $7,400 a year earlier, according to a May report by Experian PLC.EXPGY +0.18%

Auto lending has been a big area of growth for banks as demand for credit cards and other consumer loans has remained tepid.

U.S. Bancorp USB +0.14%, the largest U.S. regional bank by assets, has been “moving more aggressively in auto loans,” Chief Executive Richard Davis said during an investor conference earlier this month.

Wells Fargo WFC +0.21% & Co., the fourth-largest U.S. bank by assets, has expanded its auto-lending business significantly. The San Francisco-based bank’s auto-loan portfolio increased 11.3% in the first quarter to $52.6 billion.

Wells Fargo has improved its credit quality in the auto-lending business in recent years, Thomas Wolfe, executive vice president of consumer credit solutions for the bank, said during an investor presentation in May. “We have moved upstream slightly,” he said, adding that the bank does “a lot more prime financing than we do non-prime or subprime financing.”

Total outstanding U.S. auto loans have risen to $875 billion in the first quarter of 2014, the highest level in more than a decade, according to Federal Reserve Bank of New York data.

Earlier this month, General Motors Financial Co. sold off its largest bond backed by subprime auto loans since 2007, garnering the lowest yields in more than a year compared with an interest rate benchmark.

Bond investors have gravitated to auto loans because delinquencies are low and the bond deals weathered the financial crisis with few rating downgrades, a stark difference from bonds backed by home mortgages.

The auto-lending market faces regulatory inquiries as well, The Justice Department and Consumer Financial Protection Bureau have been investigating whether lenders’ practices have led to discrimination against women and minorities.

 

Moody’s: Risky Borrowers Default at Higher Rates

 

Senior Editor WSJ

Lenders beware: junk-rated companies that borrow with few strings attached are defaulting at higher-than-average rates.

Analysts at Moody’s Investors Service MCO -0.22% studied 423 U.S. companies that borrowed money on easy terms between 2005 through the first quarter of 2014. By tracking their default rates over three-year intervals, the analysts discovered that the average default rate totaled 18.8%, compared with a 13.4% rate for all high-yield loan borrowers.

More companies are getting access to those so-called covenant-lite loans. More than half of loans in the $750 billion junk loan market lacked financial covenants, according to a recent analysis by S&P Capital IQ.

Recently, pest-control and cleaning company Servicemaster Global Holdings Inc., borrowed $1.83 billion in a covenant-lite loan. Other recent borrowers included designer fashion house Kate Spade & Co. and nut specialist Diamond Foods Inc.DMND +0.29%

Covenants are triggers that could force borrowers to shore up their financial health. Those triggers usually involve periodic tests of overall debt levels and cash flow to cover scheduled interest payments.

Moody’s study also found that the covenant-lite loans are becoming a larger part of companies’ capital structures.

“It’s a worrisome trend,” said Moody’s analyst Julia Chursin. She noted that a smaller debt cushion means that lenders will take bigger losses in a default, because there are fewer lenders behind them in the capital structure to absorb losses.

Moody’s analysts found that covenant-lite lenders recovered less: 79 cents on the dollar versus 82 cents for all lenders in their database.

The growth in riskier loans is starting to concern regulators. The Office of the Comptroller of the Currency released a report on Wednesday, which cited the growth of risky high-yielding loans with looser underwriting standards as an area of “supervisory concern.”

 

Bloomberg: Americans Due to Replace Oldest  Goods Since JFK; Jewelry? FDR

By Michelle Jamrisko – Dec 3, 2013 8:37 AM ET
Victor J. Blue/Bloomberg
Customers try out mattresses in the showroom of an Ikea store in the Brooklyn borough of New York City.

Americans have been holding on to their wobbly washing machines and sagging sofas even longer than their grandparents did 50 years ago, setting the stage for a rebound in consumer spending as old household goods wear out.

The average age of consumer durable goods — long-lasting items such as furniture, appliances and computers — is the highest since 1962, according to data from the Bureau of Economic Analysis dating to 1925. Among things Americans are keeping for the longest time: jewelry and wristwatches and home and garden tools like lawnmowers.

Replacement purchases, overdue after the worst recession since the Great Depression, would boost the consumer spending that accounts for 70 percent of the economy. Automobilesales are headed for their best year since 2007, showing Americans have the financial security to buy more expensive items, and economists say that means household-goods sales will pick up.

Such purchases are “postpone-able for only so long,” said John Silvia, chief economist for Wells Fargo Securities LLC in Charlotte, North Carolina, the biggest U.S. mortgage lender. Increases in home values, along with gains in consumer confidence, incomes and employment from recessionary lows, make “people sense it’s worth putting money back into that house” with purchases such as appliances, he said.

Cars and luggage were the only two of 17 categories the BEA tracks that saw a decrease in average age in 2012, according to the data released Nov. 14. The average age of jewelry was 5.3 years, the oldest since 1942, while that of home and garden tools was 5.1 years, the highest since 1961. The categories include products that typically last at least three years.

Replacement Pattern

The data show a replacement cycle that started in the post-World War II era as people moved to the suburbs and made purchases to set up their households, said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York.

The average age of goods rises during an economic downturn, and “towards the middle of an expansion, you tend to see these numbers start to come down, and that means people are buying more stuff,” said Dutta, who projects durables purchases will pick up next year.

Appliance maker Whirlpool Corp. of Benton Harbor, Michigan, expects bigger gains in 2014 from people replacing aging goods, Bob Bergeth, the company’s general manager of national contract builder sales, said in a telephone interview. “There is quite a bit of pent-up demand,” he said.

Broken Burners

“People who have lived with one burner or two burners on their stove that have been working now feel more secure in their job outlook and employment and even wage increases,” Bergeth said. “They’re increasingly coming back into the market and replacing that range.”

Manufacturing in the U.S. accelerated in November at the fastest pace in more than two years as companies boosted production to keep up with growing orders, figures from the Institute for Supply Management showed yesterday.

Steven Orlikowski, a software developer in Houston, said he’s ready to replace the five-year-old computer he’s been getting along with since he “rediscovered thrift” after losing his job in 2009.

The 36-year-old, who has since found a new job, said he’s shopping this week to take advantage of holiday discounting.

“I’ve got to replace it, because that one is pretty much dead in the water,” he said. “I’m in a good position right now” to make more expensive purchases.

Lifting Growth

A jump in household durable-goods demand would help lift U.S. growth that is little changed from last year’s 2 percent average annualized rate. Gross domestic product expanded at a 2.1 percent rate so far in 2013 and 2.3 percent since the recession ended in June 2009.

Consumer spending in the three months ended September rose at the slowest pace since 2011. That reflected the weakest gain in four years in expenditures for services such as haircuts or consulting and doesn’t mean Americans aren’t willing to make lasting purchases, Dutta said.

Rising property values and sustained home sales in the face of climbing mortgage rates give businesses such as Lowe’s Cos. confidence that consumers have only started to swap out old household goods.

There is “an emerging willingness among consumers to finally replace items that are worn or outdated or to make significant enhancements to their homes,” Gregory Bridgeford, chief customer officer at the second-largest U.S. home-improvement retailer, said on a Nov. 20 earnings call.

Slow Build

Even so, “it’s a slow build,” he said.

One reason: Consumers are reluctant to take on more debt after the recession forced them to clean up their finances.

Household debt as a share of income was 92.2 percent last quarter, a decade low and down from its peak of 114 percent in 2009. The debt-service ratio, which measures how much income is devoted to paying off obligations, has also steadied after dropping last year to a record low.

Thirty-six percent of consumers listed keeping current on bills as their top financial priority, according to a Bankrate.com survey conducted Nov. 7-10. Twenty percent prioritized paying down debt and 18 percent said they were most concerned with saving money.

Revolving debt, which includes credit-card spending, shrank by $2.1 billion in September, the fourth straight month of declines and the longest such stretch in almost three years, according to Federal Reserve data. Non-revolving credit, which includes financing for college tuition and autos, increased $15.8 billion.

Casual Spending

Those figures show consumers are less likely to run up credit-card balances with casual expenditures such as movie tickets or restaurant meals, Silvia said. That doesn’t mean they’ll continue to put off major purchases, he said.

“A number of people will have to come back and say OK, I’ve postponed this now for three to five years, we really need to get it done,” Silvia said.

If so, they may find financing more readily available as banks ease standards for consumer loans. Among 70 banks polled for the Federal Reserve’s quarterly senior loan officers’ surveyin October, all said credit standards for consumer loan approvals were either unchanged or had eased somewhat. All 65 banks who responded specifically about approving auto loans also said the standards had stayed the same or loosened.

Cars and light trucks sold at a 15.2 million annualized rate in October, the 12th consecutive month above the 15-million mark for the longest streak since February 2008. The rise has supported companies such as Fort Lauderdale, Florida-based AutoNation Inc., the largest U.S. retailer of cars and trucks.

“The auto-credit environment remains strong,” Chief Executive Officer Michael J. Jackson said on an Oct. 24 earnings call. Further sales gains are “dependent upon the fundamental strength of the economic recovery in the U.S. and whether the employment picture has significantly improved from what it is today.”

To contact the reporter on this story: Michelle Jamrisko in Washington atmjamrisko@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net