United States | Risk premium on lending (lending rate minus treasury bill rate, %)

Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the "risk free" treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability. Development relevance: Both banking and financial systems enhance growth, the main factor in poverty reduction. At low levels of economic development commercial banks tend to dominate the financial system, while at higher levels domestic stock markets tend to become more active and efficient. The size and mobility of international capital flows make it increasingly important to monitor the strength of financial systems. Robust financial systems can increase economic activity and welfare, but instability can disrupt financial activity and impose widespread costs on the economy. Limitations and exceptions: Countries use a variety of reporting formats, sample designs, interest compounding formulas, averaging methods, and data presentations for indices and other data series on interest rates. The IMF's Monetary and Financial Statistics Manual does not provide guidelines beyond the general recommendation that such data should reflect market prices and effective (rather than nominal) interest rates and should be representative of the financial assets and markets to be covered. For more information, please see http://www.imf.org/external/pubs/ft/mfs/manual/index.htm. Statistical concept and methodology: The risk premium on lending is the spread between the lending rate to the private sector and the "risk-free" government rate. Spreads are expressed as an annual average. A small spread indicates that the market considers its best corporate customers to be low risk; a negative value indicates that the market considers its best corporate clients to be lower risk than the government.
Publisher
The World Bank
Origin
United States of America
Records
63
Source
United States | Risk premium on lending (lending rate minus treasury bill rate, %)
1960 1.87416667
1961 2.12416667
1962 1.72166667
1963 1.34333333
1964 0.9475
1965 0.58666667
1966 0.74333333
1967 1.30166667
1968 0.96583333
1969 1.26333333
1970 1.47333333
1971 1.38333333
1972 1.17916667
1973 0.995
1974 2.92333333
1975 2.0375
1976 1.84083333
1977 1.56
1978 1.83333333
1979 2.62333333
1980 3.65083333
1981 4.7925
1982 4.13583333
1983 2.17416667
1984 2.46916667
1985 2.44416667
1986 2.36
1987 2.3775
1988 2.64333333
1989 2.75916667
1990 2.49916667
1991 3.05416667
1992 2.79166667
1993 2.98083333
1994 2.86833333
1995 3.31583333
1996 3.24666667
1997 3.37166667
1998 3.535
1999 3.33666667
2000 3.39416667
2001 3.47
2002 3.0625
2003 3.10916667
2004 2.96666667
2005 3.0375
2006 3.23583333
2007 3.64
2008 3.6275
2009 3.09
2010 3.11583333
2011 3.1925
2012 3.1625
2013 3.19083333
2014 3.215
2015 3.2075
2016 3.19416667
2017 3.16583333
2018 2.965
2019 3.21083333
2020 3.1625
2021 3.20611111
2022

United States | Risk premium on lending (lending rate minus treasury bill rate, %)

Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the "risk free" treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability. Development relevance: Both banking and financial systems enhance growth, the main factor in poverty reduction. At low levels of economic development commercial banks tend to dominate the financial system, while at higher levels domestic stock markets tend to become more active and efficient. The size and mobility of international capital flows make it increasingly important to monitor the strength of financial systems. Robust financial systems can increase economic activity and welfare, but instability can disrupt financial activity and impose widespread costs on the economy. Limitations and exceptions: Countries use a variety of reporting formats, sample designs, interest compounding formulas, averaging methods, and data presentations for indices and other data series on interest rates. The IMF's Monetary and Financial Statistics Manual does not provide guidelines beyond the general recommendation that such data should reflect market prices and effective (rather than nominal) interest rates and should be representative of the financial assets and markets to be covered. For more information, please see http://www.imf.org/external/pubs/ft/mfs/manual/index.htm. Statistical concept and methodology: The risk premium on lending is the spread between the lending rate to the private sector and the "risk-free" government rate. Spreads are expressed as an annual average. A small spread indicates that the market considers its best corporate customers to be low risk; a negative value indicates that the market considers its best corporate clients to be lower risk than the government.
Publisher
The World Bank
Origin
United States of America
Records
63
Source