Long-Term Trends in Intra-Financial Sector Lending in the United States (1950-2012)

Montecino, Juan Antonio; Epstein, Gerald; Levina, Iren
September 2016
Eastern Economic Journal;Sep2016, Vol. 42 Issue 4, p611
Academic Journal
This paper examines the evolution of intra-financial sector lending in the United States, 1950-2012, constructing estimates from the Federal Reserve's Flow of Funds Accounts. Lending between financial institutions has grown nearly five-fold since the 1950s and currently accounts for roughly half of all financial sector lending. In the run up to the financial crisis of 2007-2008, the growth of intra-financial lending was concentrated in assets highly implicated in the genesis of the crisis, suggesting that this growth may have contributed to the crisis. This growth in intra-financial lending also raises questions about the contribution of the financial sector to the real economy.


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