Did U.S. Bank Supervisors Get Tougher During the Credit Crunch? Did They Get Easier During the Banking Boom? Did it Matter to Bank Lending?

56 Pages Posted: 15 Mar 2010 Last revised: 17 Oct 2010

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business; Wharton Financial Institutions Center; European Banking Center

Margaret Kyle

University of Toulouse 1 - Toulouse School of Economics (TSE)

Joseph M. Scalise

University of Pennsylvania, Wharton School; Bain & Company

Multiple version iconThere are 3 versions of this paper

Date Written: May 2000

Abstract

We test three hypotheses regarding changes in supervisory toughness' and their effects on bank lending. The data provide modest support for all three hypotheses that there was an increase in toughness during the credit crunch period (1989-1992), that there was a decline in toughness during the boom period (1993-1998), and that changes in toughness, if they occurred, affected bank lending. However, all of the measured effects are small, with 1% or less of loans receiving harsher or easier classification, about 3% of banks receiving better or worse CAMEL ratings, and bank lending being changed by 1% or less of assets.

Suggested Citation

Berger, Allen N. and Kyle, Margaret and Scalise, Joseph M., Did U.S. Bank Supervisors Get Tougher During the Credit Crunch? Did They Get Easier During the Banking Boom? Did it Matter to Bank Lending? (May 2000). NBER Working Paper No. w7689. Available at SSRN: https://ssrn.com/abstract=1569235

Allen N. Berger (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

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European Banking Center

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Margaret Kyle

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

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France

Joseph M. Scalise

University of Pennsylvania, Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Bain & Company

Two Copley Place
Boston, MA 02118

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