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The macroeconomic relevance of bank and nonbank credit: An exploration of U.S. data

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  • Herman, Alexander
  • Igan, Deniz
  • Solé, Juan

Abstract

This paper exploits the Financial Accounts of the United States to derive long time series of bank and nonbank credit to different sectors, and to examine the cyclical behavior of these series in relation to (i) the long-term business cycle, (ii) recessions and recoveries, and (iii) systemic financial crises. We find that bank and nonbank credit exhibit different dynamics throughout the business cycle. We also examine the role of bank and nonbank credit in the creation of financial interconnections and illustrate a method to conduct macro-financial stability assessments.

Suggested Citation

  • Herman, Alexander & Igan, Deniz & Solé, Juan, 2017. "The macroeconomic relevance of bank and nonbank credit: An exploration of U.S. data," Journal of Financial Stability, Elsevier, vol. 32(C), pages 124-141.
    • Handle: RePEc:eee:finsta:v:32:y:2017:i:c:p:124-141
    DOI: 10.1016/j.jfs.2017.06.009
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    References listed on IDEAS

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    Cited by:

    1. Kose, M. Ayhan & Sugawara, Naotaka & Terrones, Marco E., 2020. "Global Recessions," MPRA Paper 98608, University Library of Munich, Germany.
    2. Nina Boyarchenko & Leonardo Elias & Philippe Mueller, 2019. "Corporate Credit Provision," Staff Reports 895, Federal Reserve Bank of New York.
    3. repec:fip:a00001:94154 is not listed on IDEAS
    4. Larry D. Wall, 2021. "So Far, So Good: Government Insurance of Financial Sector Tail Risk," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2021(13), November.
    5. Giorgio Massari & Luca Portoghese & Patrizio Tirelli, 2024. "Whither Liquidity Shocks? Implications for R∗ and Monetary Policy," DEM Working Papers Series 217, University of Pavia, Department of Economics and Management.
    6. C. Bora Durdu & Molin Zhong, 2023. "Understanding Bank and Nonbank Credit Cycles: A Structural Exploration," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(1), pages 103-142, February.
    7. Davydiuk, Tetiana & Marchuk, Tatyana & Rosen, Samuel, 2024. "Direct lenders in the U.S. middle market," Journal of Financial Economics, Elsevier, vol. 162(C).
    8. Byrne, David & Kelly, Robert, 2019. "Monetary policy expectations and risk-taking among U.S. banks," Research Technical Papers 6/RT/19, Central Bank of Ireland.
    9. Esti Kemp & Rene van Stralen & Alexandros Vardoulakis & Peter J. Wierts, 2018. "The Non-Bank Credit Cycle," Finance and Economics Discussion Series 2018-076, Board of Governors of the Federal Reserve System (U.S.).
    10. Probir Kumar Bhowmik & Shahadat Hossain & Niluthpaul Sarker, 2025. "Liquidity in State-owned Banks: what matters the most," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 15(1), pages 1-5.

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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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