Table [ ]. Source: Calorimis
The NBER data on the breakdown of the loans made by the bank members of the Federal Reserve System suggest that much of this acceleration in common stock issuance was fueled by bank credit leaking into the stock market. From February 1927 to November 1929, the total amount of loans on securities made by such banks rose from $5,78 bln. to $8,25 bln. The amount of other loans also increased.
At the same time, other financial intermediaries like life insurance companies, savings and loan associations and mutual savings banks, were also substantially increasing their asset portfolios. The pattern is summarized in Fig. [ ] below.