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?
As published in PRUDENTIAL SUPERVISION: WHAT WORKS AND WHAT DOESN'T, Frederic S. Mishkin, ed., National Bureau of Economic Research, University of Chicago Press (Chicago, IL)
Posted: 22 Dec 2000
There are 3 versions of this paper
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?
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?
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?
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.
Keywords: Bank, lending, supervision, regulation, credit crunch
JEL Classification: G21, G28, G38, E44, E58
Suggested Citation: Suggested Citation
Joseph M. Scalise
University of Pennsylvania, Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States