Alex Cukierman, 19 April 2016

Following the collapse of Lehman Brothers, there was a fall in growth rates of net banking credit and total net new bond issues. This column discusses these events in detail. It also suggests that the decrease in credit was mainly due to supply shrinkage. The persistence of credit arrest beyond the two years following Lehman’s collapse is due to gradual enactment of tougher banking regulations along with growing awareness of low bailout probabilities. 

Events

CEPR Policy Research