Senior Loan Officer Opinion Survey on Bank Lending Practices
April 2008

Table 1

Senior Loan Officer Opinion Survey on Bank Lending Practices
at Selected Large Banks in the United States ¹

(Status of policy as of April 2008)

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—to large and middle-market firms and to small firms changed? (If your bank defines firm size differently from the categories suggested below, please use your definitions and indicate what they are.)

A. Standards for large and middle-market firms (annual sales of $50 million or more):

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	2	3.6	1	3.1	1	4.2
Tightened somewhat	29	51.8	16	50.0	13	54.2
Remained basically unchanged	25	44.6	15	46.9	10	41.7
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	56	100.0	32	100.0	24	100.0

B. Standards for small firms (annual sales of less than $50 million):

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	1	1.8	0	0.0	1	4.2
Tightened somewhat	28	50.0	17	53.1	11	45.8
Remained basically unchanged	27	48.2	15	46.9	12	50.0
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	56	100.0	32	100.0	24	100.0

2. For applications for C&I loans or credit lines—other than those to be used to finance mergers and acquisitions—from large and middle-market firms and from small firms that your bank currently is willing to approve, how have the terms of those loans changed over the past three months?

A. Terms for large and middle-market firms (annual sales of $50 million or more):

a. Maximum size of credit lines

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	1	1.8	1	3.1	0	0.0
Tightened somewhat	18	32.7	9	28.1	9	39.1
Remained basically unchanged	36	65.5	22	68.8	14	60.9
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

b. Maximum maturity of loans or credit lines

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	1	1.8	1	3.1	0	0.0
Tightened somewhat	18	32.7	12	37.5	6	26.1
Remained basically unchanged	36	65.5	19	59.4	17	73.9
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

c. Costs of credit lines

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	2	3.6	2	6.3	0	0.0
Tightened somewhat	32	58.2	20	62.5	12	52.2
Remained basically unchanged	20	36.4	9	28.1	11	47.8
Eased somewhat	1	1.8	1	3.1	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

d. Spreads of loan rates over your bank's cost of funds (wider spreads=tightened, narrower spreads=eased)

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	3	5.5	2	6.3	1	4.3
Tightened somewhat	38	69.1	24	75.0	14	60.9
Remained basically unchanged	12	21.8	5	15.6	7	30.4
Eased somewhat	2	3.6	1	3.1	1	4.3
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

e. Premiums charged on riskier loans

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	12	21.8	8	25.0	4	17.4
Tightened somewhat	25	45.5	17	53.1	8	34.8
Remained basically unchanged	16	29.1	6	18.8	10	43.5
Eased somewhat	2	3.6	1	3.1	1	4.3
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

f. Loan covenants

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	1	1.8	1	3.1	0	0.0
Tightened somewhat	24	43.6	15	46.9	9	39.1
Remained basically unchanged	30	54.5	16	50.0	14	60.9
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

g. Collateralization requirements

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	0	0.0	0	0.0	0	0.0
Tightened somewhat	16	29.1	12	37.5	4	17.4
Remained basically unchanged	39	70.9	20	62.5	19	82.6
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

B. Terms for small firms (annual sales of less than $50 million):

a. Maximum size of credit lines

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	0	0.0	0	0.0	0	0.0
Tightened somewhat	12	21.8	7	21.9	5	21.7
Remained basically unchanged	43	78.2	25	78.1	18	78.3
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

b. Maximum maturity of loans or credit lines

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	0	0.0	0	0.0	0	0.0
Tightened somewhat	13	23.6	9	28.1	4	17.4
Remained basically unchanged	42	76.4	23	71.9	19	82.6
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

c. Costs of credit lines

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	1	1.8	1	3.1	0	0.0
Tightened somewhat	29	52.7	17	53.1	12	52.2
Remained basically unchanged	24	43.6	13	40.6	11	47.8
Eased somewhat	1	1.8	1	3.1	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

d. Spreads of loan rates over your bank's cost of funds (wider spreads=tightened, narrower spreads=eased)

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	2	3.6	1	3.1	1	4.3
Tightened somewhat	34	61.8	22	68.8	12	52.2
Remained basically unchanged	18	32.7	8	25.0	10	43.5
Eased somewhat	1	1.8	1	3.1	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

e. Premiums charged on riskier loans

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	8	14.5	4	12.5	4	17.4
Tightened somewhat	22	40.0	17	53.1	5	21.7
Remained basically unchanged	24	43.6	10	31.3	14	60.9
Eased somewhat	1	1.8	1	3.1	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

f. Loan covenants

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	0	0.0	0	0.0	0	0.0
Tightened somewhat	15	27.3	8	25.0	7	30.4
Remained basically unchanged	40	72.7	24	75.0	16	69.6
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	100.0

g. Collateralization requirements

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Tightened considerably	0	0.0	0	0.0	0	0.0
Tightened somewhat	12	21.8	7	21.9	5	21.7
Remained basically unchanged	43	78.2	25	78.1	18	78.3
Eased somewhat	0	0.0	0	0.0	0	0.0
Eased considerably	0	0.0	0	0.0	0	0.0
Total	55	100.0	32	100.0	23	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? (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

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	31	67.4	19	67.9	12	66.7
Somewhat important	10	21.7	6	21.4	4	22.2
Very important	5	10.9	3	10.7	2	11.1
Total	46	100.0	28	100.0	18	100.0

b. Less favorable or more uncertain economic outlook

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	3	6.5	2	7.1	1	5.6
Somewhat important	20	43.5	12	42.9	8	44.4
Very important	23	50.0	14	50.0	9	50.0
Total	46	100.0	28	100.0	18	100.0

c. Worsening of industry-specific problems (please specify industries)

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	12	26.1	6	21.4	6	33.3
Somewhat important	21	45.7	14	50.0	7	38.9
Very important	13	28.3	8	28.6	5	27.8
Total	46	100.0	28	100.0	18	100.0

d. Less aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	25	54.3	14	50.0	11	61.1
Somewhat important	19	41.3	13	46.4	6	33.3
Very important	2	4.3	1	3.6	1	5.6
Total	46	100.0	28	100.0	18	100.0

e. Reduced tolerance for risk

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	10	21.7	7	25.0	3	16.7
Somewhat important	30	65.2	19	67.9	11	61.1
Very important	6	13.0	2	7.1	4	22.2
Total	46	100.0	28	100.0	18	100.0

f. Decreased liquidity in the secondary market for these loans

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	21	45.7	11	39.3	10	55.6
Somewhat important	18	39.1	12	42.9	6	33.3
Very important	7	15.2	5	17.9	2	11.1
Total	46	100.0	28	100.0	18	100.0

g. Increase in defaults by borrowers in public debt markets

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	31	67.4	21	75.0	10	55.6
Somewhat important	13	28.3	7	25.0	6	33.3
Very important	2	4.3	0	0.0	2	11.1
Total	46	100.0	28	100.0	18	100.0

h. Increased concern about your bank's current or expected liquidity position

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	34	77.3	20	76.9	14	77.8
Somewhat important	6	13.6	4	15.4	2	11.1
Very important	4	9.1	2	7.7	2	11.1
Total	44	100.0	26	100.0	18	100.0

B. Possible reasons for easing credit standards or loan terms:

a. Improvement in your bank's current or expected capital position

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	1	50.0	1	50.0	-	-
Somewhat important	1	50.0	1	50.0	-	-
Very important	0	0.0	0	0.0	-	-
Total	2	100.0	2	100.0	-	-

b. More favorable or less uncertain economic outlook

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	1	50.0	1	50.0	-	-
Somewhat important	0	0.0	0	0.0	-	-
Very important	1	50.0	1	50.0	-	-
Total	2	100.0	2	100.0	-	-

c. Improvement in industry-specific problems (please specify industries)

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	1	50.0	1	50.0	-	-
Somewhat important	0	0.0	0	0.0	-	-
Very important	1	50.0	1	50.0	-	-
Total	2	100.0	2	100.0	-	-

d. More aggressive competition from other banks or nonbank lenders (other financial intermediaries or the capital markets)

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	2	100.0	2	100.0	-	-
Somewhat important	0	0.0	0	0.0	-	_
Very important	0	0.0	0	0.0	-	-
Total	2	100.0	2	100.0	-	-

e. Increased tolerance for risk

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	2	100.0	2	100.0	-	-
Somewhat important	0	0.0	0	0.0	-	-
Very important	0	0.0	0	0.0	-	-
Total	2	100.0	2	100.0	-	-

f. Increased liquidity in the secondary market for these loans

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	2	100.0	2	100.0	-	-
Somewhat important	0	0.0	0	0.0	-	-
Very important	0	0.0	0	0.0	-	-
Total	2	100.0	2	100.0	-	-

g. Reduction in defaults by borrowers in public debt markets

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	1	50.0	1	50.0	-	-
Somewhat important	1	50.0	1	50.0	-	-
Very important	0	0.0	0	0.0	-	-
Total	2	100.0	2	100.0	-	-

h. Reduced concern about your bank's current or expected liquidity position

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	2	100.0	2	100.0	-	-
Somewhat important	0	0.0	0	0.0	-	-
Very important	0	0.0	0	0.0	-	-
Total	2	100.0	2	100.0	-	-

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.)

A. Demand for C&I loans from large and middle-market firms (annual sales of $50 million or more):

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Substantially stronger	5	8.9	4	12.5	1	4.2
Moderately stronger	10	17.9	7	21.9	3	12.5
About the same	26	46.4	15	46.9	11	45.8
Moderately weaker	13	23.2	6	18.8	7	29.2
Substantially weaker	2	3.6	0	0.0	2	8.3
Total	56	100.0	32	100.0	24	100.0

B. Demand for C&I loans from small firms (annual sales of less than $50 million):

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Substantially stronger	1	1.8	0	0.0	1	4.2
Moderately stronger	6	10.7	4	12.5	2	8.3
About the same	33	58.9	20	62.5	13	54.2
Moderately weaker	14	25.0	8	25.0	6	25.0
Substantially weaker	2	3.6	0	0.0	2	8.3
Total	56	100.0	32	100.0	24	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? (Please respond to either A, B, or both as appropriate.)

A. If stronger loan demand (answer 1 or 2 to question 4A or 4B), possible reasons:

a. Customer inventory financing needs increased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	13	68.4	11	84.6	2	33.3
Somewhat important	4	21.1	1	7.7	3	50.0
Very important	2	10.5	1	7.7	1	16.7
Total	19	100.0	13	100.0	6	100.0

b. Customer accounts receivable financing needs increased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	13	68.4	10	76.9	3	50.0
Somewhat important	5	26.3	2	15.4	3	50.0
Very important	1	5.3	1	7.7	0	0.0
Total	19	100.0	13	100.0	6	100.0

c. Customer investment in plant or equipment increased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	13	68.4	10	76.9	3	50.0
Somewhat important	6	31.6	3	23.1	3	50.0
Very important	0	0.0	0	0.0	0	0.0
Total	19	100.0	13	100.0	6	100.0

d. Customer internally generated funds decreased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	11	57.9	8	61.5	3	50.0
Somewhat important	7	36.8	4	30.8	3	50.0
Very important	1	5.3	1	7.7	0	0.0
Total	19	100.0	13	100.0	6	100.0

e. Customer merger or acquisition financing needs increased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	15	78.9	10	76.9	5	83.3
Somewhat important	3	15.8	3	23.1	0	0.0
Very important	1	5.3	0	0.0	1	16.7
Total	19	100.0	13	100.0	6	100.0

f. Customer borrowing shifted to your bank from other bank or nonbank sources because these other sources became less attractive

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	2	11.1	1	8.3	1	16.7
Somewhat important	7	38.9	4	33.3	3	50.0
Very important	9	50.0	7	58.3	2	33.3
Total	18	100.0	12	100.0	6	100.0

B. If weaker loan demand (answer 4 or 5 to question 4A or 4B), possible reasons:

a. Customer inventory financing needs decreased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	8	40.0	3	37.5	5	41.7
Somewhat important	10	50.0	4	50.0	6	50.0
Very important	2	10.0	1	12.5	1	8.3
Total	20	100.0	8	100.0	12	100.0

b. Customer accounts receivable financing needs decreased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	10	50.0	4	50.0	6	50.0
Somewhat important	9	45.0	4	50.0	5	41.7
Very important	1	5.0	0	0.0	1	8.3
Total	20	100.0	8	100.0	12	100.0

c. Customer investment in plant or equipment decreased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	5	25.0	2	25.0	3	25.0
Somewhat important	12	60.0	5	62.5	7	58.3
Very important	3	15.0	1	12.5	2	16.7
Total	20	100.0	8	100.0	12	100.0

d. Customer internally generated funds increased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	12	60.0	5	62.5	7	58.3
Somewhat important	8	40.0	3	37.5	5	41.7
Very important	0	0.0	0	0.0	0	0.0
Total	20	100.0	8	100.0	12	100.0

e. Customer merger or acquisition financing needs decreased

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	13	65.0	6	75.0	7	58.3
Somewhat important	6	30.0	2	25.0	4	33.3
Very important	1	5.0	0	0.0	1	8.3
Total	20	100.0	8	100.0	12	100.0

f. Customer borrowing shifted from your bank to other bank or nonbank credit sources because these other sources became more attractive

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
Not important	17	85.0	8	100.0	9	75.0
Somewhat important	1	5.0	0	0.0	1	8.3
Very important	2	10.0	0	0.0	2	16.7
Total	20	100.0	8	100.0	12	100.0

6. At your bank, 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 C&I lines as opposed to the refinancing of existing loans.)

	All Respondents		Large Banks		Other Banks
	Banks	Percent	Banks	Percent	Banks	Percent
The number of inquiries has increased substantially	3	5.4	1	3.1	2	8.3
The number of inquiries has increased moderately	14	25.0	11	34.4	3	12.5
The number of inquiries has stayed about the same	28	50.0	15	46.9	13	54.2
The number of inquiries has decreased moderately	10	17.9	5	15.6	5	20.8
The number of inquiries has decreased substantially	1	1.8	0	0.0

Senior Loan Officer Opinion Survey on Bank Lending PracticesApril 2008

Table 1

Senior Loan Officer Opinion Survey on Bank Lending Practices at Selected Large Banks in the United States 1

(Status of policy as of April 2008)

Senior Loan Officer Opinion Survey on Bank Lending Practices
April 2008

Senior Loan Officer Opinion Survey on Bank Lending Practices
at Selected Large Banks in the United States ¹