How important is the balance sheet channel of monetary policy? Plot since 1996 the net tightening of

Question:

How important is the channel of monetary policy? Plot since 1996 the net tightening of credit standards for consumer and credit card loans (FRED code: DRTSCLC) and (on the right scale) household net worth (FRED code: TNWBSHNO). Do banks adjust lending conditions when household balance sheets improve or deteriorate?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...