Go to the web site of the Federal Reserve Bank of St. Louis (FRED) (fred.stlouisfed.org) and download and graph the data series for Nonperforming Total Loans (NPTLTL) from January 1988 until the most recent quarter available. Go to the web site of the National Bureau of Economic Research (nber.org) and find the dates for business cycle peaks and troughs. (The period between a business cycle peak and trough is a recession.)

a. Describe how nonperforming loans move just before, during, and just after a recession. Is the pattern the same across the three recessions in your data? Briefly explain.
b. Is there a long-term trend in nonperforming loans? What are the implications for bank profitability?