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Why were banks better off in the 2001 recession?

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  • Til Schuermann

Abstract

In a sharp turnaround from their fortunes in the 1990-91 recession, banks came through the 2001 recession reasonably well. A look at industry and economy-wide developments in the intervening years suggests that banks fared better largely because of more effective risk management. In addition, they benefited from a decline in short-term interest rates and the relative mildness of the 2001 downturn.

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  • Til Schuermann, 2004. "Why were banks better off in the 2001 recession?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Jan).
    • Handle: RePEc:fip:fednci:y:2004:i:jan:n:v.10no.1
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    References listed on IDEAS

    as
    1. Donald Morgan & Bertrand Rime & Philip Strahan, 2003. "Bank Integration and State Business Cycles," NBER Working Papers 9704, National Bureau of Economic Research, Inc.
    2. Berger, Allen N, 2003. "The Economic Effects of Technological Progress: Evidence from the Banking Industry," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(2), pages 141-176, April.
    3. Stiroh, Kevin J, 2004. "Diversification in Banking: Is Noninterest Income the Answer?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(5), pages 853-882, October.
    4. Wendy Edelberg, 2003. "Risk-based pricing of interest rates in household loan markets," Finance and Economics Discussion Series 2003-62, Board of Governors of the Federal Reserve System (U.S.).
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    Cited by:

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    2. Frederic S. Mishkin, 2006. "How Big a Problem is Too Big to Fail? A Review of Gary Stern and Ron Feldman's Too Big to Fail: The Hazards of Bank Bailouts," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 988-1004, December.
    3. Hans J. Blommestein, 2006. "Visions about the Future of Banking," SUERF Studies, SUERF - The European Money and Finance Forum, number 2006/2 edited by Morten Balling, May.
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