Recent Cutbacks in Construction Lending at BIF-Insured Depository Institutions
نویسنده
چکیده
T he topic of the “credit crunch” received considerable attention during the early 1990s. As a result, several initiatives aimed at eliminating regulatory disincentives to lending were put in place. For example, documentation requirements recently were reduced to the legal minimum for loans to small and medium-sized businesses. Also, examiners and bankers were encouraged to emphasize the character and general reputation of borrowers when considering such credits.1 In the academic arena, several studies have examined the recent portfolio adjustments of insured financial institutions to identify possible financial and/or regulatory constraints to the flow of credit. For instance, Hancock and Wilcox (1992) studied permanent single-family and commercial loans. Peek and Rosengren (1993) examined “bank dependent loans,” and Bizer (1993) analyzed commercial and industrial loans, as well as “100 percent risk-weight” loans.
منابع مشابه
Community Reinvestment Act lending: Is it profitable?
In 1977, Congress passed the Community Reinvestment Act (CRA) to encourage federally insured depository institutions to lend in lowto moderate-income neighborhoods and to lowto moderate-income people. Since then, the profitability of the many special lending programs designed to achieve these goals has been questioned on both theoretical and practical grounds. Arguments range from “if the busin...
متن کاملFinancial Cycles
Throughout the 1980s and into the early 1990s, the effects of several financial cycles severely battered the banking system of the United States. As used here, the term "cycle" does not imply a recurring phenomenon, but rather a cycle through various phases--as in a boom and bust cycle. Most of these cycles began with a prolonged period of extraordinary growth centered in a particularly risky t...
متن کاملThe CRA Implications of Predatory Lending
Traditionally, policymakers, communities, and industry have regarded the Community Reinvestment Act (“CRA”) as a positive mandate for banks and thrifts to do good by increasing investment in lowand moderate-income (“LMI”) neighborhoods. The specific purpose of CRA is to encourage federally insured depository institutions “to help meet the credit needs of the local communities in which they are ...
متن کاملMeasuring the Adjusted Monetary Base in An Era of Financial Change
he adjusted monetary base is an index that measures the effects on a central bank’s balance sheet of its open market operations, discount window lending, unsterilized foreign exchange market intervention, and changes in statutory reserve requirements. Such an index is important because the long-run path of a monetary economy’s price level is primarily determined by the path of the central bank’...
متن کاملIs Commercial Real Estate Reliving the 1980s and Early 1990s?
Concern has been rising about the health of the U.S. commercial real estate market and any impact it may have on financial markets and institutions. It is too early to judge the full extent of any problems, but commercial real estate financing has been shaken by the financial market turmoil associated with recent residential mortgage defaults. The spreads of commercial mortgage-backed securitie...
متن کامل