expansion while they grew steadily in previous expansions ( figure 5 ). consumer credit has risen at a modest rate in this recovery – comparable to that of the last cycle ( figure 6 ). this category includes auto loans, credit cards and other consumer debts that are mainly originated by banks. but it also includes student loans where the federal government is the dominant lender. student loans have risen robustly during this expansion, and have driven much of the rise of overall consumer credit. we will have much more to say about them later in today ’ s briefing. the u. s. financial system relies more heavily on capital markets than other advanced economies. bonds and other negotiable debt instruments are an important source of funding to credit - worthy corporations. indeed, the growth rate of real nonfinancial corporate bonds outstanding during this expansion has been roughly similar to that of previous expansions ( figure 7 ). a similar pattern is evident in the commercial paper market ( figure 8 ). notwithstanding the robust performance of debt markets during this expansion, the sharper decline in outstanding bank loans to businesses that i mentioned earlier was likely a contributing factor to the slower economic recovery we have observed this time around. these developments appear to have had adverse consequences on the cost and availability of credit for bank - dependent borrowers. also, in the early years of this recovery, bankdependent firms appear to have deleveraged more and invested less than firms with access to capital markets. so, the impairment of banks ’ ability to extend credit still has the potential to hinder investment and adversely affect the overall economy. we see similar correlations when it comes to lending to households. the expansion in auto lending that commenced in 2010 coincided with a recovery in auto sales, which have now essentially regained the ground they lost during the recession. until recent quarters, overall consumption growth has been slow, consistent with a pattern of slow growth in credit card balances. the most obvious case is mortgages where – after a massive tightening from 2007 to early 2010 – underwriting standards remain very tight. this tightness, especially for nonprime borrowers, has likely been a factor behind a persistently sluggish housing market that has held back this recovery relative to earlier ones. overall, these patterns of credit growth support the idea that the weakness of banks at the end of the great recession has been a contributing factor to the slow recovery of the u. s. economy since the recession. these patterns are consistent with evidence provided

to the worsening of the crisis in 2008. but the financial markets are still functioning much less efficiently than normal. it is also still difficult for companies to finance themselves in the capital market. the riksbank has also implemented a large number of unconventional measures to safeguard financial stability and mitigate the negative effects of the financial crisis. during the second half of 2008 the riksbank increased its lending to the banks by more than sek 450 billion. almost sek 200 billion of this was comprised of loans in us dollars. we have largely financed this through a swap agreement with the fed. our own foreign exchange reserve was not sufficiently large to manage such extensive lending in dollars. the increased lending has meant that the riksbank ’ s balance sheet grew during the second half of 2008 from around sek 200 billion to around sek 700 billion. we have also changed our collateral requirements so that the banks can offer more types of security as collateral and thus more easily sustain their functions in the market. we have given special liquidity assistance to kaupthing and carnegie to safeguard financial stability and ensure the functioning of the financial markets. we have begun offering loans with commercial paper as collateral to facilitate companies ’ financing. we have also signed swap agreements with iceland and latvia to support crisis management in these countries. and we have cut the interest rate. since the monetary policy meeting in february we have further extended these unconventional measures. we have decided on loans with longer maturities, with variable interest rates and with smaller supplements and we have signed a swap agreement with estonia. the swedish national debt office and finansinspektionen ( the swedish financial supervisory authority ) have also taken action to alleviate the financial crisis. the government has raised the state deposit guarantee and extended it to cover all types of deposits in accounts, it has introduced a guarantee programme, established a guarantee fund and decided on means of capital injections to the banks. at the same time, the government is conducting a more expansionary fiscal policy than before. i now intend to move on to describe international developments. international developments will be weak this year the world economy was in a slowdown phase even before september 2008. since then the deterioration in the world economy has been rapid. all of the large, developed economies are now in recession. during the fourth quarter of last year gdp growth in the united states and the euro area fell by around 6 per cent calculated on an annual rate. in japan the fall was even greater, more than 12 per cent calculated