“Anyone looking for reasons the economy is not growing faster should contemplate the bank earnings that have started to roll in.

“Wells Fargo and JPMorgan Chase reported third-quarter results on Friday. At both, revenue was lower than in the period a year earlier. JPMorgan’s revenue was down 8 percent, while Wells Fargo’s fell 3 percent.

“Revenue is a good indicator of the underlying strength of a bank’s business and the amount of demand for its loans and services. Banks can pull all manner of levers to make their earnings look better in any given quarter, but that is harder with revenue. As a result, when their top line is torpid for long periods, that prompts bigger questions.

“Banks play an important role in the economy. When they lend, they help finance spending and investment. They can also do something that other financial entities cannot. When they take in deposits and lend them out, they effectively create new money. That out-of-thin-air credit is usually a driving force in the economy.”

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