Profits and Balance Sheet Developments at U.S. Commercial Banks in 2007
Figure 20. Net percentage of selected domestic banks reporting increased spreads of rates on various types of loans over cost of funds, 1990-2008. Data plotted as curves. The net percentage of banks that increased spreads for commercial and industrial loans starts a bit above 10 percent in early 1990 and rises to about 60 percent in early 1991. It declines steadily to about negative 60 percent in mid-1994 and remains significantly negative until mid-1998. It jumps to about 50 percent in late 1998 and remains very elevated until mid-2002. Starting in late 2002, it declines sharply and consistently registers between negative 40 percent and negative 70 percent until mid-2007. It then rises sharply to around 45 percent in early 2008. The net percentage for credit card loans begins at about zero percent in 1996, oscillates between 10 percent and negative 5 percent until late 1997, falls to about negative 25 percent in 1998, rises to about 25 percent in 2001, falls to negative 10 percent in 2003, and then rises on balance to about 25 percent in early 2008. The net percentage for other consumer loans starts at about negative 5 percent in 1996, rises to about 20 percent in late 1996, falls on balance to about zero percent in 1999, rises on balance to about 15 percent by 2002, falls on balance to negative 15 percent by early 2004, rises to about 10 percent by late 2004, holds at about that level through early 2006, falls to about negative 5 percent by 2007, rises to about 15 percent in 2007, and then falls to about 5 percent in early 2008.
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 spreads less the percentage reporting a decrease.
Source: Federal Reserve Board, Senior Loan Officer Opinion Survey on Bank Lending Practices.