32 The level of bank credit provision is lower in some countries, for example the United States, where companies
obtain funding via market borrowing to a larger extent. Furthermore, it is not easy to estimate total lending in the
economy. There are a number of issues with definitions, for example, how the funding of different subsidiaries in
corporate groups should be considered. Is it lending or just internal transactions? If these internal transactions are
excluded from total lending, the banks’ share of total lending in Sweden rises to about 80 per cent.
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BANK CRISES HAVE HIGH ECONOMIC COSTS
Financial crises have occurred for many hundreds of years.
33
Modern banks have a slightly
shorter history but bank crises have nevertheless been a regular occurrence over the last
200 years. Common to these crises has been that they have also come at a major cost to
the real economy.
34
Figure 4 shows how the global financial crisis 2007-2010 affected the development of
GDP in the world. The red line shows actual GDP growth in a large number of countries.
The broken blue line shows a trend based on data from 2001 to 2007, which has been
extrapolated. Expressed in different terms, it could be said that, if GDP had developed in
the same way post-2007 as it did during the period 2001 to 2007, average GDP would
have followed the broken blue line. The broken yellow line instead represents the trend
after the global financial crisis in 2007-2010. Even though GDP fluctuates somewhat over
time, the figure is rather striking.
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
100 000
01
03
05
07
09
11
13
15
2001-2007 extrapolated trend
2009-2015 trend
Actual
Figure 4. GDP growth in the world in USD billion
Note. The figure is based on seasonally-adjusted quarterly GDP data in USD billion (where
up-to-date currency rates have been used) from the following countries: Argentina,
Belgium, Brazil, Canada, China, France, Germany, Hong Kong, India, Italy, Japan, Korea,
Luxemburg, Mexico, the Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Spain,
Sweden, Switzerland, Turkey, the United Kingdom and the United States.
Source: BIS
35
The figure indicates three things. Firstly, the global financial crisis led to a heavy fall in GDP.
Secondly, the GDP fall has been permanent insofar as the economy has not recovered
from this following the crisis. The trend of the GDP level is considerably above the actual
outcome after the crisis. Thirdly, average GDP growth is clearly lower in the aftermath
of the crisis. Currently, GDP is thirty per cent lower than if growth had continued in
33 See Reinhart and Rogoff (2009).
34 See, for example Basel Committee on Banking Supervision (2010a), Basel Committee on Banking Supervision
(2010b) and Haldane (2010).
35 See Basel Committee on Banking Supervision (2015e).
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accordance with the earlier trend. For the countries included in the figure, the aggregate
loss in GDP since the crisis amounts to more than SEK 700,000 billion (or USD 76 trillion).
