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U.S. COMMERCIAL BANK LENDING THROUGH 2008:Q4: NEW EVIDENCE FROM GROSS CREDIT FLOWS

Authors

  • SILVIO CONTESSI,

    1. Contessi: Economist, Research Division, Federal Reserve Bank of St. Louis, P.O. Box 442, St. Louis, MO 63166-0442. Phone 314-444-7410, Fax 314-444-8731, E-mail silvio.contessi@frb.org.
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  • JOHANNA L. FRANCIS

    Corresponding author
    1. Francis: Assistant Professor, Department of Economics, Fordham University, E-507 Dealy Hall, Bronx, NY 10458. Phone 718-817-4055, Fax 718-817-3518, E-mail ajofrancis@fordham.edu
      We thank Ariel Weinberger for research assistance; Chanont Banternghansa and Yu Man Tam for help with the dataset matching; Regis Barnichon, Pierangelo De Pace, Riccardo Di Cecio, Carlos Garriga, Andy Meyer, Adrian Peralta-Alva, Giorgio Topa, Fabian Valencia, and the participants of the St. Louis Fed-Washington University working group on the financial crisis for useful comments. The views expressed are those of the authors and do not represent official positions of the Federal Reserve Bank of St. Louis, the Board of Governors, or the Federal Reserve System.
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We thank Ariel Weinberger for research assistance; Chanont Banternghansa and Yu Man Tam for help with the dataset matching; Regis Barnichon, Pierangelo De Pace, Riccardo Di Cecio, Carlos Garriga, Andy Meyer, Adrian Peralta-Alva, Giorgio Topa, Fabian Valencia, and the participants of the St. Louis Fed-Washington University working group on the financial crisis for useful comments. The views expressed are those of the authors and do not represent official positions of the Federal Reserve Bank of St. Louis, the Board of Governors, or the Federal Reserve System.

Abstract

What was hiding behind the aggregate commercial bank loans through the end of 2008? We use balance sheet data for every insured U.S. commercial bank from 1999:Q1 to 2008:Q4 to construct credit expansion and credit contraction series and provide new evidence on changes in lending. Until 2008:Q3 net credit growth was 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 and for the largest banks. With the inclusion of 2008:Q4 data our series most resemble the intensification of the Savings and Loan crisis. (JEL E44, E51, G21)

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