The second factor is the panicked contraction of economic and financial activity due to the financial crisis caused by the failure of Lehman Brothers in the autumn of 2008. While balance-sheet adjustments exert chronic downward pressures as I just explained, the panicked contraction had acute effects on the economy.
Finally, credit concentrations were generally much lower, especially in construction and commercial real estate, and broadly speaking, concentration risk management practices significantly improved since the financial crisis. Following a weak first quarter that included higher credit loss provisions, secondquarter earnings showed improvement.