More on bank lending data

Further evidence on the decline in bank lending.

Last week I highlighted the debate over the degree of the contraction in bank lending. Another issue that I neglected to mention is that the series on bank lending used by Chari, Christiano and Kehoe referred only to lending by commercial banks. When assets of failed thrifts are acquired by commercial banks, the result is that the measured loans by commercial banks go up even though aggregate lending may have gone down.

Zach Pandl of Nomura Securities calls my attention to their analysis which constructs a series that tries to correct for these reclassifications. Nomura found that these corrections eliminate the increase in bank lending that one would otherwise see in the original commercial bank lending data.

all_lending_jun_09.gif

Originally published at Econbrowser and reproduced here with the author’s permission.

2 Responses to "More on bank lending data"

  1. Guest   June 3, 2009 at 12:31 pm

    The Great Oz wants everyone to be optimistic, put money in the stock market, go shopping, etc… The Great Oz does not want society to see the economic peril. Shame, shame, shame….

  2. Guest   June 3, 2009 at 1:04 pm

    As I have said repeatedly, economic activity is declining, we are in the dance of death. There’s only one solution, and that solution will be used once the collapse is complete:ban housing evictions.This will be the first step in implementing the maintenance regime I outline in my book The Eminent Domain Revolt.Ciao, fools!John Ryskamp