Listening to Loan Officers: The Impact of Commercial Credit Standards on Lending and Output

  title={Listening to Loan Officers: The Impact of Commercial Credit Standards on Lending and Output},
  author={Cara S. Lown and D. Pauly G. R. Morgan and Sonali Rohatgi},
hen the Federal Open Market Committee (FOMC) eased monetary policy on October 15, 1998, it noted the “growing caution by lenders and unsettled conditions in financial markets more generally. . . .” Sharply higher spreads on commercial paper and corporate bonds made it clear that the U.S. markets were unsettled, but how could policymakers tell if lenders were growing more cautious? Commercial bank loans are rarely traded, so loan rates are not instantly observable. Moreover, the “price” of… CONTINUE READING
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