Review

While recovery periods display many common characteristics, each such period has its own unique features which distinguish it from other recoveries. A unique feature of the current recovery period is the lack of growth of bank loans. In previous recoveries, total loans of commercial banks have increased soon after recession troughs; in the current recovery period, total loans have remained essentially unchanged since the March 1975 trough in economic activity.

Virtually all central banks are concerned about movements in interest rates since, rightly or wrongly, the public usually regards the central bank as being responsible for such movements. An influential body of economic analysis also assigns considerable importance to the effects of movements in interest rates on economic activity. In addition, central banks have traditionally been concerned with the stability or viability of financial markets, where such stability and viability is usually viewed as being endangered by substantial fluctuations of interest rates.