Since I worked at a bank a lifetime ago I have always rejected the notion that the level of interest rates controls commercial borrowing. It was ALL about relationships. If you had a good one with a bank you got loans in tight money periods, perhaps not as much as you wanted but you were "accomodated." If you didn't have a relationship you couldn't get past a teller window. Poor Milton Friedman spent his life explaining an industry he knew little about.
Gene Coyle On Jul 10, 2010, at 11:14 AM, michael perelman wrote: > In 1983, Ben Bernanke published an interesting article in which he > proposed that the real service that banks perform is the development of > long-term working relationships, which give them the informational > wherewithal to allocate capital efficiently. > > Bernanke, Ben S. 1983. "Nonmonetary Effects of the Financial Crisis in > the Propagation of the Great Depression" American Economic Review, 73: 3 > (June): pp. 257-76. > > He elaborated on this idea in: > > Bernanke, Ben. 1993. "Credit in the Macroeconomy." Federal Reserve Bank > of New York Quarterly Review, 18: 1 (Spring): pp. 50-70. > > more at: > > http://michaelperelman.wordpress.com/2010/07/10/young-ben-bernanke-economist/ > > > -- > Michael Perelman > Economics Department > California State University > Chico, CA > 95929 > > 530 898 5321 > fax 530 898 5901 > http://michaelperelman.wordpress.com > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
