AFTER three years of stagnant loan growth, The Peoples Bank in
Coldwater, Ohio, has noticed a change. Clients who two years ago
would not have qualified for a loan now find that they can. One
customer who was working for only 35 hours a week two years ago
is now working 45 to 50 hours. “That was his reason for coming
in: he had steadier income,” says Jack Hartings, president of
the seven-branch bank. Since the bank's main alternative to
lending money is buying Treasury bonds that yield only 1%-2%, Mr
Hartings is eager to make new loans.  Across the country, bank
lending, which shrank almost steadily from early 2009, is
growing again (see chart), thanks to modest employment growth,
stabilising home prices in many regions, and the Federal
Reserve's Herculean efforts to hold down interest rates.  This
is helping. In the fourth quarter, America's economy grew by
2.8% at an annual rate, the fastest in an otherwise dreary year.
Much of that was from inventory restocking which will not be
repeated. Still, consumer s