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Senior Loan Officer Opinion Survey on Bank Lending Practices
January 2014

Survey | Full report (PDF)
Table 1 | Table 2 |Chart data
Table 1 (PDF) | Table 2 (PDF) | Charts (PDF)

Table 2

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 January 2014)

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
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 19 90.5
Eased somewhat 2 9.5
Eased considerably 0 0.0
Total 21 100.0

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?

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 17 81.0
Eased somewhat 4 19.0
Eased considerably 0 0.0
Total 21 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 17 85.0
Eased somewhat 3 15.0
Eased considerably 0 0.0
Total 20 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 19 95.0
Eased somewhat 1 5.0
Eased considerably 0 0.0
Total 20 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 15 75.0
Eased somewhat 5 25.0
Eased considerably 0 0.0
Total 20 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 18 90.0
Eased somewhat 2 10.0
Eased considerably 0 0.0
Total 20 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 16 80.0
Eased somewhat 4 20.0
Eased considerably 0 0.0
Total 20 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 20 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 20 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 18 94.7
Eased somewhat 1 5.3
Eased considerably 0 0.0
Total 19 100.0

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?

 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --

 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --

 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 5 71.4
Somewhat important 2 28.6
Very important 0 0.0
Total 7 100.0

 All Respondents
BanksPercent
Not important 5 71.4
Somewhat important 2 28.6
Very important 0 0.0
Total 7 100.0
 All Respondents
BanksPercent
Not important 7 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 7 100.0
 All Respondents
BanksPercent
Not important 0 0.0
Somewhat important 4 57.1
Very important 3 42.9
Total 7 100.0

 All Respondents
BanksPercent
Not important 5 71.4
Somewhat important 2 28.6
Very important 0 0.0
Total 7 100.0
 All Respondents
BanksPercent
Not important 5 71.4
Somewhat important 1 14.3
Very important 1 14.3
Total 7 100.0
 All Respondents
BanksPercent
Not important 5 71.4
Somewhat important 1 14.3
Very important 1 14.3
Total 7 100.0

 All Respondents
BanksPercent
Not important 7 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 7 100.0

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.)

 All Respondents
BanksPercent
Substantially stronger 0 0.0
Moderately stronger 5 23.8
About the same 16 76.2
Moderately weaker 0 0.0
Substantially weaker 0 0.0
Total 21 100.0

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?

 All Respondents
BanksPercent
Not important 3 60.0
Somewhat important 2 40.0
Very important 0 0.0
Total 5 100.0

 All Respondents
BanksPercent
Not important 3 60.0
Somewhat important 2 40.0
Very important 0 0.0
Total 5 100.0
 All Respondents
BanksPercent
Not important 1 20.0
Somewhat important 4 80.0
Very important 0 0.0
Total 5 100.0
 All Respondents
BanksPercent
Not important 4 80.0
Somewhat important 1 20.0
Very important 0 0.0
Total 5 100.0

 All Respondents
BanksPercent
Not important 1 20.0
Somewhat important 2 40.0
Very important 2 40.0
Total 5 100.0
 All Respondents
BanksPercent
Not important 5 100.0
Somewhat important 0 0.0
Very important 0 0.0
Total 5 100.0
 All Respondents
BanksPercent
Not important 3 60.0
Somewhat important 1 20.0
Very important 1 20.0
Total 5 100.0

 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --

 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --
 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 -
Total 0 --

 All Respondents
BanksPercent
Not important 0 --
Somewhat important 0 --
Very important 0 --
Total 0 --

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
BanksPercent
The number of inquiries has increased substantially 0 0.0
The number of inquiries has increased moderately 3 14.3
The number of inquiries has stayed about the same 17 81.0
The number of inquiries has decreased moderately 1 4.8
The number of inquiries has decreased substantially 0 0.0
Total 21 100.0

On March 21, 2013, federal bank regulators released interagency guidance outlining high-level principles related to safe-and-sound leveraged lending activities (letter SR 13-3).2 The guidance applies to all financial institutions supervised by the Federal Reserve that engage in leveraged lending activities, and became effective on May 21, 2013. Please answer the following questions in light of the supervisory guidance. Question 7 asks what percentage of C&I loans currently on your bank's books you currently consider leveraged. Question 8 asks how your bank has changed its lending policies for leveraged loans generally in anticipation of, or as a result of, the release of the supervisory guidance. Question 9 asks about the fraction of leveraged lending that is subject to the supervisory guidance. Question 10 asks about how your bank’s underwriting or purchases of participations in various categories of leveraged lending have been affected by the supervisory guidance. Question 11 asks about your assessment of the likelihood of various possibilities for firms which otherwise would have borrowed from your bank.

7. Approximately what percentage of C&I loans currently on your bank's books do you consider to be leveraged loans? (Please report the approximate share of total C&I loans that you currently consider to be leveraged regardless of whether they have been or are potentially affected by the supervisory guidance).

 All Respondents
BanksPercent
More than 0 percent and less than 5 percent 9 52.9
More than 5 percent and less than 10 percent 4 23.5
More than 10 percent and less than 20 percent 2 11.8
More than 20 percent and less than 35 percent 2 11.8
More than 35 percent and less than 60 percent 0 0.0
More than 60 percent 0 0.0
Total 17 100.0

8. How has your bank changed its lending policies for leveraged loans generally —that is, for all leveraged loans—in anticipation of or as a result of the release of the supervisory guidance?

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 7 41.2
Remained basically unchanged 10 58.8
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 17 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 1 5.9
Remained basically unchanged 15 88.2
Eased somewhat 1 5.9
Eased considerably 0 0.0
Total 17 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 2 11.8
Remained basically unchanged 15 88.2
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 17 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 17 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 17 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 17 100.0
Eased somewhat 0 0.0
Eased considerably 0 0.0
Total 17 100.0
 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 1 5.9
Remained basically unchanged 14 82.4
Eased somewhat 2 11.8
Eased considerably 0 0.0
Total 17 100.0

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 3 17.6
Remained basically unchanged 12 70.6
Eased somewhat 2 11.8
Eased considerably 0 0.0
Total 17 100.0

9. Approximately what fraction of the dollar value of leveraged loans that typically had been underwritten or participated in by your bank do you judge has been or will be curtailed or significantly altered by the supervisory guidance?

 All Respondents
BanksPercent
More than 0 percent and less than 5 percent 5 62.5
More than 5 percent and less than 10 percent 2 25.0
More than 10 percent and less than 20 percent 1 12.5
More than 20 percent and less than 35 percent 0 0.0
More than 35 percent and less than 60 percent 0 0.0
More than 60 percent 0 0.0
Total 8 100.0

10. Please indicate how the dollar volume of your bank's underwriting (regardless of whether the underwriting is best efforts or firm commitment) or purchasing of participations in some leveraged loans for each of the following categories has been or will be affected by the supervisory guidance.

 All Respondents
BanksPercent
Decreased substantially 1 7.1
Decreased somewhat 5 35.7
Remained basically unchanged 8 57.1
Increased somewhat 0 0.0
Increased substantially 0 0.0
Total 14 100.0
 All Respondents
BanksPercent
Decreased substantially 1 7.1
Decreased somewhat 2 14.3
Remained basically unchanged 11 78.6
Increased somewhat 0 0.0
Increased substantially 0 0.0
Total 14 100.0

 All Respondents
BanksPercent
Decreased substantially 0 0.0
Decreased somewhat 0 0.0
Remained basically unchanged 14 100.0
Increased somewhat 0 0.0
Increased substantially 0 0.0
Total 14 100.0
 All Respondents
BanksPercent
Decreased substantially 0 0.0
Decreased somewhat 0 0.0
Remained basically unchanged 14 100.0
Increased somewhat 0 0.0
Increased substantially 0 0.0
Total 14 100.0

 All Respondents
BanksPercent
Decreased substantially 0 0.0
Decreased somewhat 1 7.1
Remained basically unchanged 13 92.9
Increased somewhat 0 0.0
Increased substantially 0 0.0
Total 14 100.0
 All Respondents
BanksPercent
Decreased substantially 1 7.1
Decreased somewhat 2 14.3
Remained basically unchanged 11 78.6
Increased somewhat 0 0.0
Increased substantially 0 0.0
Total 14 100.0

 All Respondents
BanksPercent
Decreased substantially 1 10.0
Decreased somewhat 0 0.0
Remained basically unchanged 8 80.0
Increased somewhat 1 10.0
Increased substantially 0 0.0
Total 10 100.0

11. If you answered that your bank “decreased substantially” or “decreased somewhat” its underwriting or purchasing of participations in some categories of leveraged loans (answers 1 or 2 to one or more loan categories in question 10), please indicate how likely the following possibilities are for the firms which would have borrowed from your bank.

 All Respondents
BanksPercent
Much less likely 1 16.7
Somewhat less likely 0 0.0
About as likely 1 16.7
Somewhat more likely 2 33.3
Much more likely 2 33.3
Unknown 0 0.0
Total 6 100.0

 All Respondents
BanksPercent
Much less likely 2 33.3
Somewhat less likely 1 16.7
About as likely 3 50.0
Somewhat more likely 0 0.0
Much more likely 0 0.0
Unknown 0 0.0
Total 6 100.0
 All Respondents
BanksPercent
Much less likely 2 33.3
Somewhat less likely 0 0.0
About as likely 2 33.3
Somewhat more likely 1 16.7
Much more likely 1 16.7
Unknown 0 0.0
Total 6 100.0

 All Respondents
BanksPercent
Much less likely 3 50.0
Somewhat less likely 0 0.0
About as likely 3 50.0
Somewhat more likely 0 0.0
Much more likely 0 0.0
Unknown 0 0.0
Total 6 100.0

Questions 12-13 ask about commercial real estate (CRE) loans at your bank, including construction and land development loans and loans secured by nonfarm nonresidential real estate. Question 12 deals with changes in your bank's standards over the past three months. Question 13 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.

12. Over the past three months, how have your bank's credit standards for approving applications for CRE loans changed?

 All Respondents
BanksPercent
Tightened considerably 0 0.0
Tightened somewhat 0 0.0
Remained basically unchanged 12 92.3
Eased somewhat 1 7.7
Eased considerably 0 0.0
Total 13 100.0

13. Apart from normal seasonal variation, how has demand for CRE loans changed over the past three months?

 All Respondents
BanksPercent
Substantially stronger 0 0.0
Moderately stronger 6 46.2
About the same 7 53.8
Moderately weaker 0 0.0
Substantially weaker 0 0.0
Total 13 100.0

Questions 14-15 ask about your bank's expectations for the behavior of loan delinquencies and charge-offs on C&I, CRE, residential real estate, and consumer loans in 2014.

14. Assuming that economic activity progresses in line with consensus forecasts, what is your outlook for delinquencies and chargeoffs on your bank's C&I loans in the following categories in 2014? (Please refer to the definitions of large and middle-market firms and of small firms suggested in question 1. If your bank defines firm size differently from the categories suggested in question 1, please use your definitions and indicate what they are.)

 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 2 9.5
Loan quality is likely to remain around current levels 19 90.5
Loan quality is likely to deteriorate somewhat 0 0.0
Loan quality is likely to deteriorate substantially 0 0.0
Total 21 100.0
 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 1 5.0
Loan quality is likely to remain around current levels 17 85.0
Loan quality is likely to deteriorate somewhat 2 10.0
Loan quality is likely to deteriorate substantially 0 0.0
Total 20 100.0

 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 1 4.8
Loan quality is likely to remain around current levels 20 95.2
Loan quality is likely to deteriorate somewhat 0 0.0
Loan quality is likely to deteriorate substantially 0 0.0
Total 21 100.0
 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 1 10.0
Loan quality is likely to remain around current levels 9 90.0
Loan quality is likely to deteriorate somewhat 0 0.0
Loan quality is likely to deteriorate substantially 0 0.0
Total 10 100.0

15. Assuming that economic activity progresses in line with consensus forecasts, what is your outlook for delinquencies and chargeoffs on your bank's commercial real estate loans in the following categories in 2014?

 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 1 12.5
Loan quality is likely to remain around current levels 6 75.0
Loan quality is likely to deteriorate somewhat 1 12.5
Loan quality is likely to deteriorate substantially 0 0.0
Total 8 100.0
 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 4 40.0
Loan quality is likely to remain around current levels 5 50.0
Loan quality is likely to deteriorate somewhat 1 10.0
Loan quality is likely to deteriorate substantially 0 0.0
Total 10 100.0

 All Respondents
BanksPercent
Loan quality is likely to improve substantially 0 0.0
Loan quality is likely to improve somewhat 0 0.0
Loan quality is likely to remain around current levels 7 87.5
Loan quality is likely to deteriorate somewhat 1 12.5
Loan quality is likely to deteriorate substantially 0 0.0
Total 8 100.0

1. As of September 30, 2013, the 21 respondents had combined assets of $1.2 trillion, compared to $2.4 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

2. The text of the letter is available at: http://www.federalreserve.gov/bankinforeg/srletters/sr1303.htm. Return to text