These entities increased their holdings of commercial and industrial loans (by $ billion), real estate loans (by $ billion), and consumer loans (by $ billion). On net, bank holding companies and banks in this size class increased their lending by about $ billion – far less than the reductions in lending at banks in the larger-size groups.
Within real estate loans, residential mortgage holdings by banking organizations declined sharply over the second half of 2008. In part, this decline reflected a slower pace of originations owing to tighter lending standards and weaker demand. But this decline also reflected the fact that banks continued to originate and sell mortgages to the GSEs as this securitization mechanism has continued to function.