TREASURY DEPARTMENT MONTHLY LENDING AND INTERMEDIATION 

SNAPSHOT 

Summary Analysis for October - December 2008 

I. Purpose of the Snapshot 

The purpose of the monthly snapshot is to provide the Treasury Department (Treasury) and the 

public with regular insight into the lending trends and intermediation activities -- including 

underwriting, buying and selling of securities, and other activities in capital markets -- of the 

banks that received the most funding via the Capital Purchase Program (CPP). 

This snapshot seeks to gather information to help answer the question posed by many during this 

crisis: “Are banks doing what they are supposed to do, providing credit to borrowers in a safe 

and sound manner?” 

Answering this question is difficult because we are in an economic downturn, during which it is 

common for lending levels to contract. During the past nine recessions, inflation-adjusted total 

private sector lending per quarter has contracted on average 30 percent from peak to trough, 

while real GDP has contracted 2.0 percent.1

 During the last quarter of 2008, unemployment rose 

from 6.5 to 7.2 percent and more than 1.5 million jobs were lost as real GDP decreased by 3.8 

percent. The demand for credit by consumers and businesses typically falls during an economic 

downturn, reflecting caution by both lenders and borrowers to take on new risk during uncertain 

economic times. This snapshot cannot, by itself, answer what lending levels would have been 

without the CPP, but levels would likely have been lower had Treasury not taken actions to 

stabilize the financial system and provided additional capital to banks through the CPP, enabling 

banks to continue lending during the financial crisis. These surveys will help Treasury and the 

public better understand lending activity in our system during this crisis by looking at some key 

metrics, such as levels, volumes, and drivers of credit. 

Why lending? Lending is clearly one of the most important ways CPP recipients can deploy this 

additional capital, as it affects Americans directly. The CPP was created to stabilize the financial 

system by directly and quickly infusing capital into viable banks, enabling them to continue to 

extend credit to businesses and consumers during this unprecedented financial market crisis and 

economic downturn. The snapshot is designed to complement a separate but related Treasury 

initiative, whereby Treasury, in collaboration with the four banking agencies, is coordinating a 

more robust statistical research initiative to analyze quarterly regulatory reporting data to 

measure the impact of the Capital Purchase Program on the banking sector. 

Why monthly? Banks report a significant amount of data to bank regulators every quarter. This 

information is typically released to the public six weeks after quarter end. The Treasury 

Department believes it is worthwhile to obtain more frequent and more real-time information in 

order to assess the impact of the CPP on bank lending and to inform policymaking as market 

conditions change. 

 

1

 Data derived from the Federal Reserve flow of funding data and from data released by the Commerce Department. 

1
Why only the top banks? The largest recipients of CPP funds represent a significant proportion 

of the banking system, or roughly 75 percent of bank holding company assets. These banks are 

diverse in terms of size, business focus, customer base, geographic coverage and product and 

service offerings. Treasury wanted to quickly but effectively provide an objective analysis to the 

public on this important topic and this targeted survey allows us to do that faster than otherwise 

possible. In addition, Treasury is in the process of developing a more streamlined snapshot for 

smaller institutions. 

II. Snapshot Design 

The snapshot contains quantitative information on three major categories of lending – consumer, 

commercial, and other activities – based on banks’ internal reporting, as well as commentary to 

explain changes in lending levels for each category. In addition, the snapshot contains a 

qualitative section that provides market color on lending demand and credit standards generally 

to help Treasury and the public meaningfully and accurately interpret the quantitative data. 

Why base the quantitative data on internal reporting? Treasury believes that it is critical to 

provide the public and Congress with as much information as possible about the programs we are 

implementing to stabilize the financial system. In this spirit, the snapshot has been designed to 

collect new information on a more frequent basis from banks. In order to do this, Treasury must 

utilize banks’ internal reporting. This snapshot complements the detailed quarterly reports 

provided by banks on activities and financial condition to regulators, which is also publicly 

available. The Treasury snapshot is focused on lending activities and will be issued on a 

monthly basis. This information will also help guide policy making going forward as Treasury 

and the federal regulators continue to coordinate to develop a comprehensive response to the 

unprecedented financial markets crisis. 

Why include both commentary and a qualitative section? Lending levels are a function of 

credit availability, which is in banks’ control, as well as a host of factors outside of banks’ 

control: loan demand, borrower creditworthiness, capital markets liquidity, the macroeconomic 

environment, etc. The purpose of the commentary and qualitative section is to allow banks to 

provide color on the interaction of these variables so that readers can put the banks’ information 

in context and draw meaningful conclusions from the quantitative data. 

What are the limits of the snapshot? The snapshot’s reliance on internal reporting means that 

aggregation by loan category and comparisons of asset and origination levels across firms may 

be imperfect. Snapshot readers should focus on trends within a firm across time, particularly in 

percentage change terms, a fact that is reflected in Treasury‘s summary analysis. 

III. Summary analysis 

1 Despite significant headwinds posed by unprecedented financial market crisis and 

economic turn, banks continued to originate, refinance and renew loans. Significant 

challenges facing both banks and consumers that impact demand for and extension of 

credit include the shut down of various credit markets and the process of loan 

2
securitization. In addition, during the last quarter of 2008, unemployment rose from 6.5 

to 7.2 percent and more than 1.5 million jobs were lost as real GDP decreased by 3.8 

percent, all of which increase the caution of consumers in taking on new loans and 

typically reduce demand for loans during a downturn. In addition, the crisis has 

negatively impacted confidence in our financial system, limiting banks’ ability to raise 

private capital that enables them to increase consumer and business lending. 

Please see the attached table detailing each bank’s loan originations over the period of the 

survey. 

2 Due to decreasing loan demand and tighter underwriting standards, as well as other 

factors such as charge-offs, or losses written off on loans, banks reported a general trend 

of modestly declining total loan balances.

a. From October to December, total residential mortgage balances across the 

twenty banks was essentially flat. The median percent change in total residential 

mortgage balances was a decrease of 1 percent. 

b. For the same period, corporate loan balances decreased slightly. The median 

percent change in total loan balances across banks was a decrease of 1 percent. 

Ten banks experienced increases in total loan balances. The driver of the decrease 

was softening loan demand, particularly by smaller businesses, as noted by 

several banks. 

c. Credit card borrowing increased, while available credit decreased. The median 

percent change in average total loan balance for U.S. credit cards was an increase 

of 2 percent. The median percent change in total used and unused commitments 

for U.S. credit cards was essentially flat. For banks with the largest credit card 

loan balances, the decrease was more marked. 

d. In commercial real estate, renewals of existing accounts increased significantly, 

while new commitments decreased significantly. The median percent change in 

renewals of existing accounts was an increase of 55 percent. The median percent 

change in new commitments was a decrease of 19 percent. Many banks noted 

challenges in this space, including “negligible” residential home builder loan 

demand and weaker construction and development activity, softening with regards 

to retailers, an uncertain outlook with regards to office space, and the continued 

dislocation of the commercial mortgage backed securities (CMBS) market. 

3 Outside factors played a big role in driving month-on-month changes. In general, lending 

activity decreased from October to November and then picked back up from November 

to December. Drivers of this phenomenon varied by loan type. 

a. A substantial increase in residential mortgage demand/applications from 

November to December was largely attributed to falling rates, driven by 

initiatives by Treasury, the Federal Reserve and other federal regulators. 

b. A similar trend was observed in the area of corporate lending, where the 

December increase in loan demand was attributed by several banks to diminished 

borrower access to other debt markets such as the commercial paper market, 

which effectively shut down in October 2008 due to the credit crisis. This market 

funds both financial and non-financial companies across the U.S. and its 

3
breakdown forced corporate borrowers to increase their relative use of bank debt 

as a source of replacement funding. 

c. Similarly, the FDIC’s Temporary Liquidity Guarantee Program (TLGP) provided 

a significant boost to debt underwriting which had been quiet for some time. The 

TLFP was launched in conjunction with the CPP in October 2008 as another 

measure by the federal government to strengthen confidence and encourage 

liquidity in the banking system by guaranteeing newly issued senior unsecured 

debt by banks and other institutions. The median percent change across firms 

from October to November was an increase of 39 percent, and from November to 

December the median percent change was an increase of was 74 percent. 

IV. Process going forward 

The Treasury Department will continue to refine this monthly analysis, including potentially 

other formats for presenting the data. While this initial snapshot included survey data from a 

three month period extending back to the launch of the CPP, monthly snapshots going forward 

will reflect data from the prior month only. 

In addition, as noted above, Treasury is working with the federal banking agencies (Federal 

Reserve, FDIC, OCC and OTS) to conduct research on the impact that the Troubled Assets 

Relief Program and other federal programs have had on banks’ health, lending and financial 

intermediation. Treasury anticipates publishing this analysis as it becomes available. 

4
Name First Mortgage HELOC (Lines and Increases)

US Card 

(Managed): 

Initial Line 

Amount

Other Consumer 

Lending

C & I: Renewal of 

Existing Accounts

C & I: New 

Commitments

CRE: R

Existin

Bank of America $44,611 $5,326 $6,753 $6,986 $52,852 $49,004 BB&T $3,682 $694 $401 $1,108 $1,779 $4,399 

Bank of New York Mellon $212 $34 $0 $17 $802 $1,055 

Capital One $7 $72 $3,671 $2,131 $576 $1,930 

CIT $0 $0 $0 $3 $10,387 $3,341 

Citigroup $16,274 $1,122 $27,121 $4,219 $3,553 $6,470 

Comerica $83 $102 $65 $129 $6,439 $1,255 

Fifth Third $2,551 $445 $541 $1,186 $843 $11,833 Goldman Sachs $1,086 $150 $0 $203 $571 $3,686 

JPMorgan Chase $28,271 $1,606 $17,900 $6,037 $57,127 $48,533 

KeyCorp $315 $467 $0 $237 $3,439 $2,375 

Marshall & Ilsley $411 $130 $16 $155 $1,318 $777 

Morgan Stanley $0 $0 $0 $657 $1,098 $9,504 

Northern Trust $240 $319 $0 $421 $1,082 $2,709 

PNC $20 $766 $200 $551 $15,354 $5,546 

Regions $1,022 $487 $0 $310 $4,586 $2,627 

State Street $0 $0 $0 $0 $2,045 $890 

SunTrust $7,205 $440 $53 $1,151 $4,075 $3,628 

U.S. Bancorp $8,390 $1,427 $2,886 $2,692 $11,513 $9,062 Wells Fargo $48,189 $1,736 $3,715 $2,571 $10,915 $17,623 

Loan Originations (Sum of October, November and December)

First MortgagesHELOCUS Card (Managed)C & ICRE Commercial real estateNOTE: Reliance on internal reporting means that aggregation by loan category varies for each reporting bank. Because of the differences in loan category definitions, comparisons of origination levels across firms may be imperfect. 

Loan Category Key*

Loans secured by first liens on residential real estateHome equity lines of creditUS credit cards (managed)Commercial and industrial