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Long-Term Trends in Intra-Financial Sector Lending in the United States (1950–2012)

Author

Listed:
  • Juan Antonio Montecino

    (Department of Economics, University of Massachusetts)

  • Gerald Epstein

    (Department of Economics and Political Economy Research Institute (PERI), University of Massachusetts)

  • Iren Levina

    (Department of Economics, Kingston University)

Abstract

This paper examines the evolution of intra-financial sector lending in the United States, 1950–2012, constructing estimates from the Federal Reserve’s Flow of Funds Accounts. Lending between financial institutions has grown nearly five-fold since the 1950s and currently accounts for roughly half of all financial sector lending. In the run up to the financial crisis of 2007–2008, the growth of intra-financial lending was concentrated in assets highly implicated in the genesis of the crisis, suggesting that this growth may have contributed to the crisis. This growth in intra-financial lending also raises questions about the contribution of the financial sector to the real economy.

Suggested Citation

  • Juan Antonio Montecino & Gerald Epstein & Iren Levina, 2016. "Long-Term Trends in Intra-Financial Sector Lending in the United States (1950–2012)," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 42(4), pages 611-629, September.
    • Handle: RePEc:pal:easeco:v:42:y:2016:i:4:d:10.1057_eej.2015.1
    DOI: 10.1057/eej.2015.1
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    References listed on IDEAS

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    5. Juan A. Montecino & Gerald Epstein, 2014. "Intra-Financial Lending, Credit, and Capital Formation," Working Papers Series 21, Institute for New Economic Thinking.
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    Cited by:

    1. Daniel Carvalho, 2022. "Intra-financial assets and the intermediation role of the financial sector," Trinity Economics Papers tep0622, Trinity College Dublin, Department of Economics.
    2. Luke Petach, 2020. "Local financialization, household debt, and the great recession," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 807-839, June.
    3. Juan A. Montecino & Gerald Epstein, 2014. "Intra-Financial Lending, Credit, and Capital Formation," Working Papers Series 21, Institute for New Economic Thinking.
    4. Gerald Epstein, 2014. "Restructuring finance to promote productive employment," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 11(2), pages 161-170, September.
    5. Shromona Ganguly, 2021. "Financialization of the Real Economy: New Empirical Evidence from the Non-financial Firms in India Using Conditional Logistic Model," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 19(3), pages 493-523, September.
    6. Leila E. Davis, 2017. "Financialization And Investment: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1332-1358, December.

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