Profits and Balance Sheet Developments at U.S. Commercial Banks in 2007
Figure 6. Changes in demand and supply conditions at selected banks for commercial and industrial loans to large and middle-market firms, 1990-2007. Data plotted as curves. Two panels. In the top panel, the net percentage of banks reporting stronger demand begins in late 1991 at about negative 30 percent. The generally volatile series then moves up, on balance, to about 40 percent in 1994, moves down to about zero percent in 1995, then moves in a range of between about zero percent and 30 percent through the end of 1999, when it again registers about zero percent. It falls, on balance, to a low of about negative 70 percent in 2001, rises to about 45 percent in 2005, drops to about 16 percent in early 2006, and continues to fall during 2007, with a low of about negative 23 and a final value of about negative 17. In the bottom panel, the net percentage of banks reporting tighter standards begins at almost 60 percent in mid-1990, drops to reach about negative 20 percent in mid-1993, and generally remains negative, but a little less so, through mid-1998. It spikes at the end of 1998 to about 36 percent, then drops back to about 7 percent in 1999, and holds there for several quarters. In early 2000, it begins climbing to reach nearly 60 percent in early 2001. It then begins dropping to reach about negative 25 percent in mid-2005, rising to about zero percent by the end of 2006, and continuing to rise in 2007, with a final value of about 19 percent.
Note: The data are drawn from a survey generally conducted four times per year; the last observation is from the January 2008 survey, which covers 2007:Q4. Net percentage is the percentage of banks reporting an increase in demand or a tightening of standards less, in each case, the percentage reporting the opposite. The definition for firm size suggested for, and generally used by, survey respondents is that large and middle-market firms have annual sales of $50 million or more.
1. Series on net percentage of banks reporting stronger demand begins with the November 1991 survey.
2. Series on net percentage of banks reporting tighter standards begins with the May 1990 survey.
Source: Federal Reserve Board, Senior Loan Officer Opinion Survey on Bank Lending Practices.