Figure 7. Changes in demand and supply conditions at selected banks for commercial and industrial loans to large and middle-market firms, 1990-2008.
Data are plotted as curves. There are 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 negative 3 percent in 1995, then moves in a range of between negative 9 to about 29 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 percent and a value of about negative 16 percent by year-end. The first quarter of 2008 continues this upward trend, rising to zero in the first quarter of 2008, then dropping sharply to about negative 60 percent in the last quarter of 2008. 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, then starts dropping to reach about negative 25 percent in mid-2005. It then rises to about zero percent by the end of 2006, continues to steadily rise in 2007 and 2008, with a value of about 83 percent in the third quarter of 2008, then drops to 65 percent by year-end.
NOTE: The data are drawn from a survey generally conducted four times per year; the last observation is from the January 2009 survey, which covers 2008: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 Practice.
