BHC Loan Growth¶
Definition¶
The natural logarithm of a bank's total loans in the current quarter, divided by its total loans in the previous quarter.^{2} Here the total loans are measures by BHCK2122
in FR Y9C reports. This item represents the proportion of a bank's total loans that do not exclude the allowance for loans and lease losses.
where BHCK2122
is from the Bank Holding Company data by the Federal Reserve Bank of Chicago.^{1}
Warning
A caveat is that if \text{BHCK2122}_{i,t} is 0, then this measure would be invalid as \ln(0) is undefined. In this case, I replace it with 1 which means the total loans is reduced by 100% to 0.
An alternative measure of loan growth, the percentage change in the total loans, is not affected by this issue.
Their correlation is over 99%.
Equivalent Stata Code¶
1 2 3 4 5 

Reference¶

https://www.chicagofed.org/banking/financialinstitutionreports/bhcdata. ↩

This definition is from Zheng (2020 JBF). ↩