We follow the STBL instructions when mapping the risk classes: "minimal" risk loans are for borrowers with a AA or higher rating on their public debt while "low" risk loans are for borrowers with a BBB or higher rating.
In short, the similar time trend between the two loan-number-based aggregate output series seems more an empirical feature of the STBL data during this particular sample period, and there is no compelling theoretical basis to believe that this similarity will continue indefinitely.
To compute the respective risk premium on C&I loans, we rely on the Federal Reserve's STBL to gauge the default risk and maturity composition of C&I loans and find the best matched market securities.
Among the four risk categories reported in the STBL, two have readily available reference market securities.
Having obtained legitimacy from the STBL
, universities are now able to develop their economic sensitivities.
RISK1 equals one when the bank reports on the STBL
that the loan carries "minimal" risk.
Evidence from other data sources corroborated these qualitative responses from the BLPS: The spreads on loans in the riskier categories in the STBL
increased steadily during 2001 and the first half of 2002, and they increased to a much greater extent than did the spreads on loans rated as having "low" or "minimal" risk (chart 22).
Credit flow patterns from the STBL
also suggested tighter financial conditions for business borrowers, particularly for higher-risk loans not made under commitment; such loans fell significantly in 2000, bottoming out at about 6 percent as a share of total C&I loan originations reported in the STBL
Graph omitted] Evidence from the STBL
A statistical examination of the Federal Reserve's quarterly Survey of Terms of Business Lending (STBL
) suggests that loans made under commitment and maturing in the first three months of 2000 were only minimally more expensive because of their maturity dates--about 6 basis points.
replaced the Quarterly Interest Rate Survey and portions of the Survey of Selected Interest Rates.
Nevertheless, the average of measured spreads reported in the STBL
narrowed over the preceding several years, so results from both surveys are broadly indicative of aggressive pricing of business loans.