The credit cycle does exist

<ns3:p>Pipień and Tymoczko (2024) make a unique contribution to the literature on the financial cycle, by extracting credit cycle positions at the bank level, rather than focusing on aggregate data. They interpret the results as indicating “a differentiation of credit cycles in individual banks”. Also, they suggest the credit cycle is driven mainly by one bank.In this study I use the same data – for banks operating in Poland – to reinterpret their results and arrive at the following conclusions. First, since – contrary to the dominant stream of the literature – Pipień and Tymoczko (2024) do not focus on medium-term frequencies, their bank-level credit cycle positions are dominated by the business cycle, rather than the financial cycle. Second, even using the same measure of the cycle, the common component for respective banks is substantial. Focusing on medium-term frequencies makes it account for 72% of variability. Third, I find the contributions of respective banks to the cycle to be more balanced.</ns3:p>