D10.2: [Nonperforming loans and recessions] 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.)

Peak month (Peak Quarter)	Trough month (Trough Quarter)	Contraction	Expansion	Cycle
		Duration, peak to trough	Duration, trough to peak	Duration, trough to trough	Duration, peak to peak

July 1990 (1990Q3)	March 1991 (1991Q1)	8	92	100	108
March 2001 (2001Q1)	November 2001 (2001Q4)	8	120	128	128
December 2007 (2007Q4)	June 2009 (2009Q2)	18	73	91	81
February 2020 (2019Q4)	April 2020 (2020Q2)	2	128	130	146

a. Describe how non performing 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?