Senior Loan Officer Opinion Survey on Bank Lending Practices
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Senior Loan Officer Opinion Survey on Bank Lending Practices at Selected Branches and Agencies of Foreign Banks in the United States 1
(Status of Policy as of October 2023)
Questions 1-6 ask about commercial and industrial (C&I) loans at your bank. Questions 1-3 deal with changes in your bank's lending policies over the past three months. Questions 4-5 deal with changes in demand for C&I loans over the past three months. Question 6 asks about changes in prospective demand for C&I loans at your bank, as indicated by the volume of recent inquiries about the availability of new credit lines or increases in existing lines. If your bank's lending policies have not changed over the past three months, please report them as unchanged even if the policies are either restrictive or accommodative relative to longer-term norms. If your bank's policies have tightened or eased over the past three months, please so report them regardless of how they stand relative to longer-term norms. Also, please report changes in enforcement of existing policies as changes in policies.
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 | 2 | 10.5 |
| Remained basically unchanged | 17 | 89.5 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
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 | 1 | 5.3 |
| Remained basically unchanged | 18 | 94.7 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
b. Maximum maturity of loans or credit lines
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 1 | 5.6 |
| Remained basically unchanged | 17 | 94.4 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 18 | 100 |
c. Costs of credit lines
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 2 | 10.5 |
| Remained basically unchanged | 17 | 89.5 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
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 | 3 | 15.8 |
| Remained basically unchanged | 16 | 84.2 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
e. Premiums charged on riskier loans
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 1 | 5.3 |
| Tightened somewhat | 2 | 10.5 |
| Remained basically unchanged | 15 | 78.9 |
| Eased somewhat | 1 | 5.3 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
f. Loan covenants
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 2 | 10.5 |
| Remained basically unchanged | 17 | 89.5 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
g. Collateralization requirements
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 0 | 0.0 |
| Tightened somewhat | 1 | 5.3 |
| Remained basically unchanged | 18 | 94.7 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
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 | 19 | 100.0 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 19 | 100 |
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? (Please respond to either A, B, or both as appropriate.)
A. Possible reasons for tightening credit standards or loan terms:
a. Deterioration in your bank's current or expected capital position
Responses are not reported when the number of respondents is 3 or fewer.
b. Less favorable or more uncertain economic outlook
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not Important | 0 | 0.0 |
| Somewhat Important | 2 | 50.0 |
| Very Important | 2 | 50.0 |
| Total | 4 | 100 |
c. Worsening of industry-specific problems. (please specify industries)
Responses are not reported when the number of respondents is 3 or fewer.
d. Less aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)
Responses are not reported when the number of respondents is 3 or fewer.
e. Reduced tolerance for risk
Responses are not reported when the number of respondents is 3 or fewer.
f. Decreased liquidity in the secondary market for these loans
Responses are not reported when the number of respondents is 3 or fewer.
g. Deterioration in your bank's current or expected liquidity position
Responses are not reported when the number of respondents is 3 or fewer.
h. Increased concerns about the effects of legislative changes, supervisory actions, or accounting standards
Responses are not reported when the number of respondents is 3 or fewer.
B. Possible reasons for easing credit standards or loan terms:
a. Improvement in your bank's current or expected capital position
Responses are not reported when the number of respondents is 3 or fewer.
b. More favorable or less uncertain economic outlook
Responses are not reported when the number of respondents is 3 or fewer.
c. Improvement in industry-specific problems (please specify industries)
Responses are not reported when the number of respondents is 3 or fewer.
d. More aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)
Responses are not reported when the number of respondents is 3 or fewer.
e. Increased tolerance for risk
Responses are not reported when the number of respondents is 3 or fewer.
f. Increased liquidity in the secondary market for these loans
Responses are not reported when the number of respondents is 3 or fewer.
g. Improvement in your bank's current or expected liquidity position
Responses are not reported when the number of respondents is 3 or fewer.
h. Reduced concerns about the effects of legislative changes, supervisory actions, or accounting standards
Responses are not reported when the number of respondents is 3 or fewer.
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 | 3 | 16.7 |
| About the same | 14 | 77.8 |
| Moderately weaker | 1 | 5.6 |
| Substantially weaker | 0 | 0.0 |
| Total | 18 | 100 |
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? (Please respond to either A, B, or both as appropriate.)
A. If stronger loan demand (answer 1 or 2 to question 4), possible reasons:
a. Customer inventory financing needs increased
Responses are not reported when the number of respondents is 3 or fewer.
b. Customer accounts receivable financing needs increased
Responses are not reported when the number of respondents is 3 or fewer.
c. Customer investment in plant or equipment increased
Responses are not reported when the number of respondents is 3 or fewer.
d. Customer internally generated funds decreased
Responses are not reported when the number of respondents is 3 or fewer.
e. Customer merger or acquisition financing needs increased
Responses are not reported when the number of respondents is 3 or fewer.
f. Customer borrowing shifted to your bank from other bank or nonbank sources because these other sources became less attractive
Responses are not reported when the number of respondents is 3 or fewer.
g. Customer precautionary demand for cash and liquidity increased
Responses are not reported when the number of respondents is 3 or fewer.
B. If weaker loan demand (answer 4 or 5 to question 4), possible reasons:
a. Customer inventory financing needs decreased
Responses are not reported when the number of respondents is 3 or fewer.
b. Customer accounts receivable financing needs decreased
Responses are not reported when the number of respondents is 3 or fewer.
c. Customer investment in plant or equipment decreased
Responses are not reported when the number of respondents is 3 or fewer.
d. Customer internally generated funds increased
Responses are not reported when the number of respondents is 3 or fewer.
e. Customer merger or acquisition financing needs decreased
Responses are not reported when the number of respondents is 3 or fewer.
f. Customer borrowing shifted from your bank to other bank or nonbank sources because these other sources became more attractive
Responses are not reported when the number of respondents is 3 or fewer.
g. Customer precautionary demand for cash and liquidity decreased
Responses are not reported when the number of respondents is 3 or fewer.
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 | 4 | 22.2 |
| The number of inquiries has stayed about the same | 13 | 72.2 |
| The number of inquiries has decreased moderately | 1 | 5.6 |
| The number of inquiries has decreased substantially | 0 | 0.0 |
| Total | 18 | 100 |
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 properties. 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 or credit lines changed?
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Tightened considerably | 1 | 6.7 |
| Tightened somewhat | 4 | 26.7 |
| Remained basically unchanged | 10 | 66.7 |
| Eased somewhat | 0 | 0.0 |
| Eased considerably | 0 | 0.0 |
| Total | 15 | 100 |
For this question, 4 respondents answered "My bank does not originate CRE loans."
8. Apart from normal seasonal variation, how has demand for CRE loans or credit lines changed over the past three months? (Please consider the number of requests for new spot loans, for disbursement of funds under existing loan commitments, and for new or increased credit lines.)
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Substantially stronger | 0 | 0.0 |
| Moderately stronger | 1 | 6.7 |
| About the same | 10 | 66.7 |
| Moderately weaker | 4 | 26.7 |
| Substantially weaker | 0 | 0.0 |
| Total | 15 | 100 |
This special question, Question 9, asks about the reasons why your bank changed lending standards over the past three months.
9. If your bank tightened or eased lending standards or terms over the past three months for C&I or CRE loans, how important are the following possible reasons for the change? (Please respond to either A, B or both as appropriate.)
A. Possible reasons for tightening lending standards:
a. Less favorable or more uncertain economic outlook
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 0 | 0.0 |
| Somewhat important | 5 | 55.6 |
| Very important | 4 | 44.4 |
| Total | 9 | 100 |
b. Deterioration in, or desire to improve, your bank's capital position
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 6 | 75.0 |
| Somewhat important | 1 | 12.5 |
| Very important | 1 | 12.5 |
| Total | 8 | 100 |
c. Deterioration in, or desire to improve, your bank's liquidity position
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 6 | 75.0 |
| Somewhat important | 0 | 0.0 |
| Very important | 2 | 25.0 |
| Total | 8 | 100 |
d. Deterioration in customers' collateral values
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 2 | 22.2 |
| Somewhat important | 2 | 22.2 |
| Very important | 5 | 55.6 |
| Total | 9 | 100 |
e. Less aggressive competition from other banks or nonbank lenders
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 8 | 100.0 |
| Somewhat important | 0 | 0.0 |
| Very important | 0 | 0.0 |
| Total | 8 | 100 |
f. Reduced tolerance for risk
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 3 | 33.3 |
| Somewhat important | 4 | 44.4 |
| Very important | 2 | 22.2 |
| Total | 9 | 100 |
g. Increased difficulty of selling loans in the secondary market
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 4 | 40.0 |
| Somewhat important | 5 | 50.0 |
| Very important | 1 | 10.0 |
| Total | 10 | 100 |
h. Deterioration in credit quality of commercial real estate loans
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 3 | 33.3 |
| Somewhat important | 3 | 33.3 |
| Very important | 3 | 33.3 |
| Total | 9 | 100 |
i. Deterioration in credit quality of loans other than commercial real estate loans
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 4 | 50.0 |
| Somewhat important | 4 | 50.0 |
| Very important | 0 | 0.0 |
| Total | 8 | 100 |
j. Increased concerns about deposit outflows at your bank
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 6 | 75.0 |
| Somewhat important | 2 | 25.0 |
| Very important | 0 | 0.0 |
| Total | 8 | 100 |
k. Increased concerns about declines in the market value of your bank's fixed-income assets
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 8 | 100.0 |
| Somewhat important | 0 | 0.0 |
| Very important | 0 | 0.0 |
| Total | 8 | 100 |
l. Increased concerns about your bank's funding costs
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 7 | 87.5 |
| Somewhat important | 0 | 0.0 |
| Very important | 1 | 12.5 |
| Total | 8 | 100 |
m. Increased concerns about the adverse effects of legislative changes, supervisory actions, or changes in accounting standards
| All Respondents | ||
|---|---|---|
| Banks | Percent | |
| Not important | 7 | 77.8 |
| Somewhat important | 1 | 11.1 |
| Very important | 1 | 11.1 |
| Total | 9 | 100 |
B. Possible reasons for easing lending standards:
a. More favorable or less uncertain economic outlook
Responses are not reported when the number of respondents is 3 or fewer.
b. Improvement in your bank's capital position
Responses are not reported when the number of respondents is 3 or fewer.
c. Improvement in your bank's liquidity position
Responses are not reported when the number of respondents is 3 or fewer.
d. Improvement in customers' collateral values
Responses are not reported when the number of respondents is 3 or fewer.
e. More aggressive competition from other banks or nonbank lenders
Responses are not reported when the number of respondents is 3 or fewer.
f. Increased tolerance for risk
Responses are not reported when the number of respondents is 3 or fewer.
g. Increased ease of selling loans in the secondary market
Responses are not reported when the number of respondents is 3 or fewer.
h. Improvement in credit quality of commercial real estate loans
Responses are not reported when the number of respondents is 3 or fewer.
i. Improvement in credit quality of loans other than commercial real estate loans
Responses are not reported when the number of respondents is 3 or fewer.
j. Reduced concerns about deposit outflows at your bank
Responses are not reported when the number of respondents is 3 or fewer.
k. Reduced concerns about declines in the market value of your bank's fixed-income assets
Responses are not reported when the number of respondents is 3 or fewer.
l. Reduced concerns about your bank's funding costs
Responses are not reported when the number of respondents is 3 or fewer.
m. Reduced concerns about the adverse effects of legislative changes, supervisory actions, or changes in accounting standards
Responses are not reported when the number of respondents is 3 or fewer.
1. As of June 30, 2023, the 19 respondents had combined assets of $1.6 trillion, compared to $3.1 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