... that the bank receives. For instance, a positive shock to the value of the collateral that is pledged to banks implies a lower risk for the bank and thus the bank can grant more loans for a given ... Business Cycle Analysis”, in Friedman, B. and Woodford, M. (eds.), Handbook of Monetary Economics, Vol. 3, North-Holland, Amsterdam, 2010. 5 Goodfriend, M., and, McCallum, B., “Banking and interest ... developments and the assessment of nominal trends. Persistent changes in banks’ behaviour are likely to affect the economy in an enduring and signicant manner. The analysis of money and credit...