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>Banks stopped lending to consumers as readily as they had before the crisis This is an interesting narrative that fits well with the current anti-bank populis

>Banks stopped lending to consumers as readily as they had before the crisis This is an interesting narrative that fits well with the current anti-bank populist sentiment, but I'm not sure the data supports it. According to FRED data, Outstanding Consumer Credit contracted some after the financial crisis, as banks got their balance sheets in order, but it quickly spiked back to pre-recession levels, and has been growing at historically consistent rates ever since. Mortgage rates also hit all-time lows during the aftermath, which benefited consumers (though application conditions tightened).

mikeyouse 12y ago
Here's a chart that 'half' backs your point; http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=zTq http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=z... There's clearly a lower slope on the log-scale than there was pre-recession, but it is still increasing. I haven't seen an update, but the Cleveland Fed wrote an article about this specific measure of commercial lending in 2011; http://www.clevelandfed.org/research/trends/2011/0211/01banfin.cfm http://www.clevelandfed.org/research/trends/2011/0211/01banf...
- hnnewguy 12y ago
  >There's clearly a lower slope on the log-scale than there was pre-recession, but it is still increasing. Absolutely. Credit contracted pretty much across the board from 2008 to about 2010. I'm just not sure the story is "banks were lending to rich companies at low rates while the little guy couldn't get a loan". It seems to me there was a hiccup, then it was business as usual. Let's not forget easy credit was one cause of the depth and length of the Great Recession. I think the ease at which credit was available for a decade pre-recession has skewed our generation's view of "normal" credit conditions.
pjmorris 12y ago
Don't you have to back out mortgages, auto loans, and student loans to get a sense of how borrowing for business is affected?

mikeyouse 12y ago

Here's a chart that 'half' backs your point; http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=zTq http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=z... There's clearly a lower slope on the log-scale than there was pre-recession, but it is still increasing. I haven't seen an update, but the Cleveland Fed wrote an article about this specific measure of commercial lending in 2011; http://www.clevelandfed.org/research/trends/2011/0211/01banfin.cfm http://www.clevelandfed.org/research/trends/2011/0211/01banf...

hnnewguy 12y ago
>There's clearly a lower slope on the log-scale than there was pre-recession, but it is still increasing. Absolutely. Credit contracted pretty much across the board from 2008 to about 2010. I'm just not sure the story is "banks were lending to rich companies at low rates while the little guy couldn't get a loan". It seems to me there was a hiccup, then it was business as usual. Let's not forget easy credit was one cause of the depth and length of the Great Recession. I think the ease at which credit was available for a decade pre-recession has skewed our generation's view of "normal" credit conditions.

pjmorris 12y ago

Don't you have to back out mortgages, auto loans, and student loans to get a sense of how borrowing for business is affected?