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Federal Reserve Bank of Boston
Working Papers
The role of real estate in the New England credit crunch
Joe Peek
Eric S. Rosengren

Banks, particularly in New England, have experienced major losses of capital as a result of their exposure to risky real estate loans. These losses, accompanied by strict enforcement of capital regulations, have caused banks to shrink their assets in an attempt to improve their capital/asset ratios. Poorly capitalized banks have contracted their real estate loans much more than their better-capitalized peers. In New England, which experienced widespread shocks to bank capital, credit availability for real estate is being constrained by capital-impaired lenders.

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Joe Peek & Eric S. Rosengren, The role of real estate in the New England credit crunch, Federal Reserve Bank of Boston, Working Papers 92-4, 1992.
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Keywords: Real property ; Credit ; Bank loans ; Banks and banking - New England ; New England
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