Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of St. Louis
Working Papers
U.S. commercial bank lending through 2008:Q4: new evidence from gross credit flows
Silvio Contessi
Johanna L. Francis
Abstract

How have U.S. commercial banks responded during the current financial crisis? What was hiding behind the dynamics of aggregate commercial bank loans through the end of 2008? We use balance sheet data for the entire population of commercial banks to construct quarterly gross credit flows (credit expansion and credit contraction series) for the U.S. banking system during the period 1999:Q1-2008:Q4 and provide new evidence on changes in lending. We show that credit expansion, as defined in this paper, began declining during the first half of 2008 while credit contraction began steeply increasing only between the third and fourth quarters of 2008. Until then net credit growth was below trend but positive and not dissimilar to the 1980 and 2001 recessions. However, between the third and fourth quarter credit contraction grew larger than credit expansion across all types of loans (real estate, individual, commercial, and industrial loans) and for the largest banks. On the contrary, smaller banks continued to display positive net credit growth. Once we include 2008:Q4 data, the cyclical properties of our series most resemble the beginning of the 1991 recession and the intensification of the Savings and Loan crisis.


Download Full text
Cite this item
Silvio Contessi & Johanna L. Francis, U.S. commercial bank lending through 2008:Q4: new evidence from gross credit flows, Federal Reserve Bank of St. Louis, Working Papers 2009-011, 2009.
More from this series
JEL Classification:
Subject headings:
Keywords: Financial crises ; Business cycles ; Credit
For corrections, contact Anna Oates ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal