Your U.S.-centered macrofinance (macro and/or banking) textbook will discuss different types of traditional bank loans under three headings:

a. Commercial and Industrial Loans (C&I)

b. Consumer Loans

c. Real Estate Loans

If you were to look at the data either in the aggregate (H8 release, weekly data collected from the largest U.S. banks) or from the regulatory reports you’ll also notice a fourth category.

d. Other Loans

The H8 release is most practical for a quick analysis of lending patterns. Here’s a precise description of the sample/population: “The H.8 release is primarily based on data that are reported weekly by a sample of approximately 875 domestically chartered banks and foreign-related institutions. As of December 2009, U.S. branches and agencies of foreign banks accounted for about 60 of the weekly reporters and domestically chartered banks made up the rest of the sample. Data for domestically chartered commercial banks and foreign-related institutions that do not report weekly are estimated at a weekly frequency based on quarterly Call Report data.”

What are these loans exactly?

Real Estate Loans are the sum of Residential and Commercial Loans (revolving home equity loans and closed-end residential loans), C&I Loans are non-real estate loans to businesses, and Consumer Loans include both credit cards and other revolving plans, and other consumer loans.

Textbooks will typically discuss the share of loans a-c in banks portfolio and point to the sizable increase in the share of Real Estate Loans between the mid-1990s and 2007, i.e. the end of the 2000s housing “exuberance,” (yes, right, let’s just call it ‘exuberance,’ ehm) and the subsequent adjustment through the mid-2010s.

In parallel, C&I loans have been falling as a share of total loans and they are now somewhere close to 20% (vs. approximately 40% in the early 1950s). There are many reasons for this trend as well and I’ll explore them in the future.

So, there we go with the time series graphs (long and short)

USA-Loans by type-timeseries-1947-2016-.png


and the pie-charts:


Notice that here I’m computing each type of loan as a share of total loans but not plotting Other loans in the time series graphs. In the pie-charts, instead, I have all four types.

Interesting talking points:

  • what are cyclical properties of different types of loans?
  • why have C&I loans been falling (as a share of total loans) over time?
  • what’s going on in the Fall of 2008 with the big spike of Real Estate Loans (wasn’t this a “banking” crisis?)  … see this.
  • and what about the spike in Consumer Loans in March 2010… see this.

Link to the background