[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-325263-105":59,"doc-detail-325263-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","do-excess-reserves-reveal-credit-crunches","Do Excess Reserves Reveal Credit Crunches?","","The paper examines whether excess reserves—funds banks hold above legally required levels—can reliably reveal a credit crunch. It reviews early-1990 media interpretations of reduced bank lending and clarifies that “credit crunch” reflects broader nonprice forces depressing investment. The analysis argues Meltzer’s excess-reserves logic is incomplete because reserve levels depend on Federal Reserve operating procedures, especially when the Fed targets interest rates rather than monetary aggregates.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/do-excess-reserves-reveal-credit-crunches/325263/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/do-excess-reserves-reveal-credit-crunches/325263.png","ImageObject",300,407,{"name":92,"@type":93},"Aurora","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-11-08","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",13,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What does the paper mean by a “credit crunch” and why is the term difficult to quantify?","Question",{"text":113,"@type":114},"A credit crunch refers to a substantial reduction in credit driven by more than rising interest rates, including nonprice factors that depress investment. Its broad definition makes it hard to pinpoint using simple measures.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"How does excess reserves relate to whether banks are reluctant to lend?",{"text":118,"@type":114},"In a simplified banking-system logic, if banks become reluctant to lend, deposits grow less and reserves end up above the required level (excess reserves). The paper explains how reserve mechanics and the federal funds market can complicate institution-level readings.",{"name":120,"@type":111,"acceptedAnswer":121},"Why does the paper conclude excess reserves are often an unreliable indicator of credit conditions?",{"text":122,"@type":114},"Because excess reserves depend directly on Federal Reserve monetary policy procedures. If the Fed targets interest rates and uses operations to add or drain reserves, it can absorb surplus funds and mask any signal from bank lending.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},325263,1790148132,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":105,"preview_page_count":4},4810365810221,"https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d","# Do Excess ReservesReveal Credit Crunches?\n\nby Joseph G.Haubrich  \nhe anticipated economic recovery ishaunted by the specter that banks,underpressure from regulators and sharehold-ers,will make too few loans to reignitethe economy.Like a phantom,this so-called credit crunch eludes attempts topin it down,quantify it,or dissect it.  \nConcem about a credit shortage sur-faced in media accounts in early 1990,even before the recession materialized.Businesses complained that banks wereless willing to lend money,and this dis-satisfaction was interpreted as a sign ofa credit crunch.\"Credit crunch\"is anadmittedly nebulous term indicating asubstantial reduction in credit—onewhose dimensions extend wellbeyondrising interest rates to nonprice factorsthat depress investment.  \nThe appropriate policy response tosigns of a credit crunch depends on thesource of the problem.For example,ifrestrictive monetary policy is seen asthe culprit,then easing is the correct re-sponse,as long as other factors remainconstant.If banks are flush with fundsbut are reluctant to lend,then their lend-ing policies and those of their regulatorswarrant scrutiny.If businesses are sim-ply not seeking loans because of a pooreconomic outlook,then that is an alto-gether different matter.  \nDifficulty in determining whether weare experiencing a credit crunch cannotbe blamed on insufficientdata,becausea variety of credit numbers are avail-able,including bank loans,mortgages,  \ndomestic nonfinancial debt,and con-sumer installment loans.Instead,theproblem lies in disentangling the manyinfluences on credit,including demand,supply,and monetary and fiscal policy.Those who have declared that a crunchis under way,alleging that reduced lend-ing is the result of a lower supply offunds from banks,have merely chosenone of many possible explanations  \nOne way to distinguish the effects ofmonetary policy from those of banklending practices is to look at excessreserves,or funds that banks hold inexcess of those required by law.AllanMeltzerthe distinguished Carnegie-Melon economist,and his colleagueson the Shadow Open Market Commit-tee use this approach to label the recentcredit crunch reports as \"nonsense.\"Meltzer argues that if banks were reluc-tant to lend(because of higher capitalrequirements,lower retums,or fiendishregulators),their reservations wouldshow up as an increase in excess re-serves.This uptick has not occurred.  \nMeltzer's position fails to take into ac-count the fact that the excess reservelevel depends directly on the FederalReserve's monetary policy procedures.This Economic Commentary shows thatexcess reserves can clearly identify acredit crunch only under very restrictiveconditions:First,the Federal Reservemust be targeting only the monetaryaggregates,and second,it must remainfim in its commitment to these targetsover time.  \nJuly 15,1991  \nDoes an increase in excess reservesindicate that a credit crunch is underway,as one recent report suggests?The author examines this issue fromboth a current and a historical per-spective and finds that because thelevel of excess reserves dependsdirectly on Federal Reserve policy,this measure is generally an unreli-able indicator of credit conditions.  \n■ How Might Excess ReservesIndicate a Credit Crunch?Banks are required to hold reserves(cash on hand and deposits with the Fed-eral Reserve)equal to about 12 percentof their transactions deposits,therebylimiting the amount of money they canlend.Thus,it is monetary policy,in theform of reserves that the Fed injects intothe system,that restricts lending.If theFed adds reserves,the banking systemnormallyincreases lending and depositsuntil the reserves required on the result-ing deposits match the newly injectedreserves.(Banks borrowing from theFed and the public's demand for cashcomplicate the matter somewhat,butthe basic premise holds.)Because inter-est is not paid on reserves,banks gen-erally try to hold as few as possible  \nDuring a credit crunch,however,banksmay decide not to make ","cbCaii8mDtvxGYMD","https://ap.wps.com/l/cbCaii8mDtvxGYMD","pdf",1257878,"English","# Do Excess Reserves Reveal Credit Crunches?\n## How Might Excess Reserves Indicate a Credit Crunch?\n## Federal Reserve Operating Procedures","[{\"question\":\"What does the paper mean by a “credit crunch” and why is the term difficult to quantify?\",\"answer\":\"A credit crunch refers to a substantial reduction in credit driven by more than rising interest rates, including nonprice factors that depress investment. Its broad definition makes it hard to pinpoint using simple measures.\"},{\"question\":\"How does excess reserves relate to whether banks are reluctant to lend?\",\"answer\":\"In a simplified banking-system logic, if banks become reluctant to lend, deposits grow less and reserves end up above the required level (excess reserves). The paper explains how reserve mechanics and the federal funds market can complicate institution-level readings.\"},{\"question\":\"Why does the paper conclude excess reserves are often an unreliable indicator of credit conditions?\",\"answer\":\"Because excess reserves depend directly on Federal Reserve monetary policy procedures. If the Fed targets interest rates and uses operations to add or drain reserves, it can absorb surplus funds and mask any signal from bank lending.\"}]","Do Excess Reserves Reveal Credit Crunches? | PDF",1789970077]