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Working Paper
Identifying the macroeconomic effect of loan supply shocks
Evidence of an operative credit channel has been inconclusive. The inability to clearly distinguish the effects of shocks to loan supply from those to loan demand has made it difficult to quantify the importance of this transmission mechanism to the economy. This paper provides an innovative approach to identifying loan supply shocks that enables us to show that such disturbances have had economically important effects on the U.S. economy over the past two decades. We provide three different pieces of evidence that confirm that loan supply shocks have been successfully isolated from shifts in ...
Journal Article
Japanese banking problems: implications for lending in the United States
Fueled by a high saving rate, active exporting firms, and a booming stock market, Japanese banks expanded aggressively worldwide during the 1980's. By 1988, all of the 10 largest banks in the world were Japanese, with a significant presence in Southeast Asia, Europe, Latin America, and the United States. In the 1990's, however, the tide turned. Japanese banks experienced a significant diminution of capital as a result of sharp declines in the Japanese stock market and substantial increases in nonperforming loans. Increasingly constrained by international capital requirements, Japanese ...
Conference Paper
Crunching the recovery: bank capital and the role of bank credit
Conference Paper
Factors affecting the Japanese premium
Journal Article
How well capitalized are well-capitalized banks?
The wave of bank and savings and loan failures in the 1980s and early 1990s, and the resulting losses to deposit insurance funds, served to highlight the need for banks to hold sufficient capital to survive difficult times. In addition, many argued that deposit insurance reduces the market discipline that depositors might otherwise provide. Consequently, recent bank regulatory initiatives increasingly have emphasized the role of bank capital as a cushion to allow banks to absorb adverse shocks without experiencing insolvency.> While regulations are being designed to reward banks that are ...
Journal Article
The evolution of bank lending to small business
This article examines how consolidation, along with the use of credit-scoring models for lending, may be reflected in recent patterns of small business lending by banks. The authors find that the market for small business lending has been substantially influenced both by the wave of bank consolidations and by the adoption of efficiency-enhancing information technologies at banks.
Journal Article
Household wealth composition: the impact of capital gains
Working Paper
The measurement and determinants of single-family house prices
We assess the conceptual and empirical features of a number of house price series for the United States. We then calculate a measure of the net upgrading of the existing stock of houses that took place during the 1950-1989 period and adjust price indexes for this net increase in quality. Judgments about the trend, volatility, and determinants of house prices are shown to depend crucially on which price series is used. The Freddie Mac upgrade adjusted house price measure rose 5.7% over the past four decades, falling 7.7% from 1950 through 1970 before rising 14.5% from 1970 through 1989. Real ...
Journal Article
Have borrower concentration limits encouraged bank consolidation?
Bank consolidation has been going on for more than a decade, in part the result of legislative and regulatory changes and in part a reflection of the large number of banks that became financially troubled in the late 1980s and early 1990s. However, the rapid consolidation of institutions still continues, even though the health of most banks has improved and many states long ago liberalized regulations on intrastate branching and interstate merging. This suggests that other factors may also be playing an important role. The large number of mergers involving target banks with assets under $100 ...