JP Morgan Chase 2015 Annual Report Download - page 47

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pricing and credit oerings are needed the
most. The chart below shows how banks
continued to be there for their clients as the
markets were not.
Corporations get the vital credit they need
by issuing securities, including commercial
paper, or by borrowing from banks. You can
see in the chart below the dramatic drop in
the issuance of securities and commercial
paper once the financial crisis hit. Commer-
cial paper outstanding alone dropped by
$1 trillion, starving companies in desperate
need of cash. You can see that bank loans
outstanding, for the most part, were steady
and consistent. This means that banks
continued to renew or roll over credit to their
clients – small, medium and large – when it
was needed the most.
This will be a little bit harder to do in
the future because capital, liquidity and
accounting rules are essentially more procy-
clical than they were in the past. We esti-
mate that if we were to enter a very dicult
market, such as 2008, our capital needs could
increase by 10%. Despite the market need for
credit, banks would be in a position where,
all things being equal, they would need to
reduce the credit extended to maintain their
own strong capital positions.
Quarterly Capital Markets Issuances and U.S. Bank Loans Outstanding
2007—2010
($ in trillions)
1 Includes high-yield and investment-grade bonds.
2 Includes collateralized loan obligations and excludes mortgage-backed issuances.
3 Includes initial public offerings (IPOs) and secondary market offerings.
$(3.3)
0
900
1800
2700
3600
4500
4Q103Q102Q101Q104Q093Q092Q091Q094Q083Q082Q081Q084Q073Q072Q071Q07
Commercial paper outstanding (right scale)
Capital markets issuances (left scale)
 Corporate bonds1  ABS2  Equity3
$2.0 $2.1 $1.9 $1.8 $1.8 $1.7 $1.6 $1.7 $1.5 $1.2 $1.3 $1.1 $1.1 $1.0 $1.1 $1.0
Commercial paper
outstanding
Total capital
markets issuances $4.0 $4.0 $2.3 $1.9 $1.4 $2.0 $0.7 $0.8 $1.2 $1.8 $1.2 $1.1 $1.2 $0.8 $1.3 $1.5
U.S. bank loans outstanding (left scale)
2000
4000
6000
$7.0
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0 $0.0
$1.0
$2.0
$3.0