Discussion Paper

What Do Banks Do with All That \\"Fracking\\" Money?

Abstract: Banks play a crucial role in the economy by channeling funds from savers to borrowers. The ability of banks to accomplish this intermediation has become an important element in understanding the causes and consequences of business cycles. In a recent staff report, I investigate how a positive deposit windfall translates into investments by banks. This post, the first of two, shows how the development of new energy resources has led to deposit inflows to banks and how that can be used to estimate banks? investment decisions over the recent business cycle. The second post will look at factors that might explain the business cycle patterns observed below.

Keywords: Lending; Financial Intermediation; Business Cycle;

JEL Classification: G2;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2014-12-01

Number: 20141201