Senior Loan Officer Opinion Survey on Bank Lending Practices
Senior Loan Officer Opinion Survey on Bank Lending Practices at Selected Branches and Agencies of Foreign Banks in the United States1
(Status of policy as of July 2017)
Questions 1-6 Over the past three months, how have your bank's credit standards for approving applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—changed?
1. Over the past three months, how have your bank's credit standards for approving applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—changed?
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 0 | 0.0 |
| Remained basically unchanged | 21 | 100.0 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 21 | 100.0 |
2. For applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—that your bank currently is willing to approve, how have the terms of those loans changed over the past three months?
a. Maximum size of credit lines
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 2 | 9.1 |
| Remained basically unchanged | 20 | 90.9 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 22 | 100.0 |
b. Maximum maturity of loans or credit lines
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 0 | 0.0 |
| Remained basically unchanged | 22 | 100.00 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 22 | 100.0 |
c. Costs of credit lines
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 1 | 4.5 |
| Remained basically unchanged | 20 | 90.9 |
| Eased somewhat | 1 | 4.5 |
| Eased considerably | 0 | 0.0 |
| Total | 22 | 100.0 |
d. Spreads of loan rates over your bank's cost of funds (wider spreads=tightened, narrower spreads=eased)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 1 | 4.5 |
| Remained basically unchanged | 17 | 77.3 |
| Eased somewhat | 4 | 18.2 |
| Eased considerably | 0 | 0.0 |
| Total | 22 | 100.0 |
e. Premiums charged on riskier loans
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 1 | 4.5 |
| Remained basically unchanged | 19 | 86.4 |
| Eased somewhat | 2 | 9.1 |
| Eased considerably | 0 | 0.0 |
| Total | 22 | 100.0 |
f. Loan covenants
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 0 | 0.0 |
| Remained basically unchanged | 21 | 100..0 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 21 | 100.0 |
g. Collateralization requirements
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 0 | 0.0 |
| Remained basically unchanged | 22 | 100.0 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 22 | 100.0 |
h. Use of interest rate floors (more use=tightened, less use=eased)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 0 | 0.0 |
| Remained basically unchanged | 18 | 85.7 |
| Eased somewhat | 3 | 14.3 |
| Eased considerably | 0 | 0.0 |
| Total | 21 | 100.0 |
3. If your bank has tightened or eased its credit standards or its terms for C&I loans or credit lines over the past three months (as described in questions 1 and 2), how important have been the following possible reasons for the change?
A. Possible reasons for tightening credit standards or loan terms:
a. Deterioration in your bank's current or expected capital position
b. Less favorable or more uncertain economic outlook
c. Worsening of industry-specific problems (please specify industries)
d. Less aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)
e. Reduced tolerance for risk
f. Decreased liquidity in the secondary market for these loans
g. Deterioration in your bank's current or expected liquidity position
h. Increased concerns about the effects of legislative changes, supervisory actions, or accounting standards
B. Possible reasons for easing credit standards or loan terms:
a. Improvement in your bank's current or expected capital position
b. More favorable or less uncertain economic outlook
c. Improvement in industry-specific problems (please specify industries)
d. More aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)
e. Increased tolerance for risk
f. Increased liquidity in the secondary market for these loans
g. Improvement in your bank's current or expected liquidity position
h. Reduced concerns about the effects of legislative changes, supervisory actions, or accounting standards
4. Apart from normal seasonal variation, how has demand for C&I loans changed over the past three months? (Please consider only funds actually disbursed as opposed to requests for new or increased lines of credit.)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Substantially stronger | 0 | 0.0 |
| Moderately stronger | 2 | 9.1 |
| About the same | 17 | 77.3 |
| Moderately weaker | 3 | 13.6 |
| Substantially weaker | 0 | 0.0 |
| Total | 22 | 100.0 |
5. If demand for C&I loans has strengthened or weakened over the past three months (as described in question 4), how important have been the following possible reasons for the change?
A. If stronger loan demand (answer 1 or 2 to question 4), possible reasons:
a. Customer inventory financing needs increased
b. Customer accounts receivable financing needs increased
c. Customer investment in plant or equipment increased
d. Customer internally generated funds decreased
e. Customer merger or acquisition financing needs increased
f. Customer borrowing shifted to your bank from other bank or nonbank sources because these other sources became less attractive
g. Customer precautionary demand for cash and liquidity increased
B. If weaker loan demand (answer 4 or 5 to question 4), possible reasons:
a. Customer inventory financing needs decreased
b. Customer accounts receivable financing needs decreased
c. Customer investment in plant or equipment decreased
d. Customer internally generated funds increased
e. Customer merger or acquisition financing needs decreased
f. Customer borrowing shifted from your bank to other bank or nonbank sources because these other sources became more attractive
g. Customer precautionary demand for cash and liquidity decreased
6. At your bank, apart from normal seasonal variation, how has the number of inquiries from potential business borrowers regarding the availability and terms of new credit lines or increases in existing lines changed over the past three months? (Please consider only inquiries for additional or increased C&I lines as opposed to the refinancing of existing loans.)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| The number of inquiries has increased substantially | 0 | 0.0 |
| The number of inquiries has increased moderately | 3 | 14.3 |
| The number of inquiries has stayed about the same | 17 | 81.0 |
| The number of inquiries has decreased moderately | 1 | 4.8 |
| The number of inquiries has decreased substantially | 0 | 0.0 |
| Total | 21 | 100.0 |
Questions 7-8 ask about commercial real estate (CRE) loans at your bank, including construction and land development loans and loans secured by nonfarm nonresidential real estate. Question 7 deals with changes in your bank's standards over the past three months. Question 8 deals with changes in demand. If your bank's lending standards or terms have not changed over the relevant period, please report them as unchanged even if they are either restrictive or accommodative relative to longer-term norms. If your bank's standards or terms have tightened or eased over the relevant period, please so report them regardless of how they stand relative to longer-term norms. Also, please report changes in enforcement of existing standards as changes in standards.
7. Over the past three months, how have your bank's credit standards for approving applications for CRE loans changed?
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 1 | 7.1 |
| Remained basically unchanged | 13 | 92.9 |
| Eased somewhat | 0 | 0 |
| Eased considerably | 0 | 0.0 |
| Total | 14 | 100.0 |
8. Apart from normal seasonal variation, how has demand for CRE loans changed over the past three months?
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Substantially stronger | 0 | 0.0 |
| Moderately stronger | 6 | 42.9 |
| About the same | 7 | 50.0 |
| Moderately weaker | 1 | 7.1 |
| Substantially weaker | 0 | 0.0 |
| Total | 14 | 100.0 |
Question 9 asks you to describe the current level of lending standards at your bank relative to the range of standards that has prevailed between 2005 and the present, a period which likely encompasses a wide range of standards as seen over a credit cycle. For each of the loan categories listed below, please consider the points at which standards at your bank were tightest and easiest during this period.
9. Over the past year, how has your bank changed the following policies on construction and land development loans? (Please assign each policy a number between 1 and 5 using the following scale: 1=tightened considerably, 2=tightened somewhat, 3=remained basically unchanged, 4=eased somewhat, 5=eased considerably.)
A. C&I loans:
a. Syndicated or club loans (large loans originated by a group of relationship lenders) to investment-grade firms (or unrated firms of similar creditworthiness)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 0 | 0.0 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 3 | 13.6 |
| Near the midpoint of the range that standards have been during this period | 15 | 68.2 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 3 | 13.6 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 1 | 4.5 |
| Near the tightest level that standards have been during this period | 0 | 0.0 |
| Total | 22 | 100.0 |
b. Syndicated or club loans to below-investment-grade firms (or unrated firms of similar creditworthiness)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 1 | 4.5 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 5 | 22.7 |
| Near the midpoint of the range that standards have been during this period | 11 | 50.0 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 2 | 9.1 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 3 | 13.6 |
| Near the tightest level that standards have been during this period | 0 | 0.0 |
| Total | 22 | 100.0 |
c. Non-syndicated loans to large and middle-market firms (annual sales of $50 million or more)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 0 | 0.0 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 2 | 11.1 |
| Near the midpoint of the range that standards have been during this period | 9 | 50.0 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 3 | 16.7 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 4 | 22.2 |
| Near the tightest level that standards have been during this period | 0 | 0.0 |
| Total | 18 | 100.0 |
d. Non-syndicated loans to small firms (annual sales of less than $50 million)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 0 | 0.0 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 1 | 12.5 |
| Near the midpoint of the range that standards have been during this period | 5 | 62.5 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 2 | 25.0 |
| Near the tightest level that standards have been during this period | 0 | 0.0 |
| Total | 8 | 100.0 |
B. Loans secured by commercial real estate:
a. For construction and land development purposes
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 0 | 0.0 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 1 | 9.1 |
| Near the midpoint of the range that standards have been during this period | 3 | 27.3 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 3 | 27.3 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 2 | 18.2 |
| Near the tightest level that standards have been during this period | 2 | 18.2 |
| Total | 11 | 100.0 |
b. Secured by nonfarm nonresidential properties
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 0 | 0.0 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 1 | 8.3 |
| Near the midpoint of the range that standards have been during this period | 5 | 41.7 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 3 | 25.0 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 2 | 16.7 |
| Near the tightest level that standards have been during this period | 1 | 8.3 |
| Total | 12 | 100.0 |
c. Secured by multifamily residential properties
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 0 | 0.0 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 1 | 9.1 |
| Near the midpoint of the range that standards have been during this period | 6 | 54.5 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 2 | 18.2 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 2 | 18.2 |
| Near the tightest level that standards have been during this period | 0 | 0.0 |
| Total | 11 | 100.0 |
C. Lending to nondepository financial institutions:
a. Loans or lines of credit to nondepository financial institutions
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Near the easiest level that standards have been during this period | 0 | 0.0 |
| Significantly easier than the midpoint of the range that standards have been during this period | 0 | 0.0 |
| Somewhat easier than the midpoint of the range that standards have been during this period | 1 | 6.3 |
| Near the midpoint of the range that standards have been during this period | 9 | 56.3 |
| Somewhat tighter than the midpoint of the range that standards have been during this period | 3 | 18.8 |
| Significantly tighter than the midpoint of the range that standards have been during this period | 3 | 18.8 |
| Near the tightest level that standards have been during this period | 0 | 0.0 |
| Total | 16 | 100.0 |
1. As of December 31, 2016, the 20 respondents had combined assets of $1.0 trillion, compared to $2.2 trillion for all foreign-related banking institutions in the United States. The sample is selected from among the largest foreign-related banking institutions in those Federal Reserve Districts where such institutions are common. Return to text
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