This figure is very close to the average dispersion of real growth rates since the 1980s. By comparison, if we look across all 50 US States, the dispersion of real growth has averaged approximately 2.5 percentage points over the last 15 years. When the United States is divided into the eight statistical regions, the average dispersion shrinks to around 1.5 percentage points.
Since the complete elimination of cyclical variations in banks’ lending activity would be an unrealistic goal, regulators should instead focus on reducing the occurrence and severity of systemic crises. To this end, the regulatory framework should be revised so as to restrain the build-up of excessive risks during the expansion phase and to dampen the costs of financial distress in the contraction phase.