Large crises tend to follow rapid credit expansions. Causality, however, is far fromobvious. We show how this pattern arises naturally when financial intermediariesoptimally exploit economic rents that drive their franchise value. As this franchise valuefluctuates over the business cycle, so too do the incentives to engage in risky lending.The model leads to novel insights on the effects of unconventional monetary policiesin developed economies. We argue that bank lending might have responded less thanexpected to these interventions because they enhanced franchise value, inadvertentlyencouraging banks to pursue safer investments in low-risk government securities.