U.S. BANK LENDING ACTIVITY IN THE POSTCRISIS WORLD

There are three main reasons banks may not be lending. First, banks could be rationing credit. We show that banks have excess reserves of more than $2 trillion, so demand exceeding supply is unlikely. Second, banks could be experiencing a capital crunch. We find no evidence of a capital crunch. Third, banks could be choosing to restrict lending, creating a credit crunch. We find that postcrisis loan growth rates are lower than crisis loan growth rates, but postcrisis loan growth is similar to precrisis growth. We find no evidence to suggest that banks are systematically restricting lending.