Accessible Version
Drivers of Bank Supply of Business Loans, Accessible Data
Figure 1: Self Reported Reasons for Changing C&I Terms or Standards
| Reason | Very Important Reason to Tighten | Somewhat Important Reason to Tighten | Somewhat Important Reason to Ease | Very Important Reason to Ease |
|---|---|---|---|---|
| Economic Outlook | 0.28100471 | 0.514913658 | 0.318947801 | 0.057131114 |
| Competition | 0.036625971 | 0.218645949 | 0.328291087 | 0.585036795 |
| Risk Tolerance | 0.152185944 | 0.498616491 | 0.254172015 | 0.023534446 |
| Industry Specific | 0.222102426 | 0.394070081 | 0.168563 | 0.034134008 |
| Defaults | 0.0453284 | 0.32839963 | 0.173716012 | 0.019637462 |
| Secondary Market | 0.076452599 | 0.26116208 | 0.187922957 | 0.034357106 |
| Legislative Changes | 0.144638404 | 0.269326683 | 0.078525641 | 0.019230769 |
| Liquidity Position | 0.05904059 | 0.108241082 | 0.114985163 | 0.024480712 |
| Capital | 0.038968167 | 0.116355653 | 0.09640592 | 0.021987315 |
Note: This figure plots banks' self reported reasons for changing terms or standards. The height of the bars above the x-axis shows the share of banks tightening terms or standards that cite a particular reason as important. The bars below the axis show the shares citing a reason as an important reason for easing. The dark portion of bars shows the share of banks citing a reason as "very important". Data covers the period from 1995 to 2019 where available, with a shorter time horizon for some questions that were added to the survey later.
Source: SLOOS.
Figure 2: Trends in Loan Performance Around a Change in Supply
Panel a. Change in Nonperforming Loan Rate
| Quarters Since SLOOS | Beta Estimate | Upper Bound | Lower bound |
|---|---|---|---|
| -6 | -0.00070945 | -0.000377953 | -0.001040947 |
| -5 | -0.000571321 | -0.000267248 | -0.000875395 |
| -4 | -0.000571101 | -0.000292952 | -0.000849251 |
| -3 | -0.000518368 | -0.000264733 | -0.000772004 |
| -2 | -0.000422555 | -0.000205184 | -0.000639927 |
| -1 | -0.000255842 | -9.32235E-05 | -0.000418461 |
| 0 | |||
| 1 | 0.000404862 | 0.000573788 | 0.000235936 |
| 2 | 0.000756135 | 0.000968731 | 0.00054354 |
| 3 | 0.000889122 | 0.001141813 | 0.000636431 |
| 4 | 0.000939984 | 0.001220292 | 0.000659676 |
| 5 | 0.000976596 | 0.001287283 | 0.000665909 |
| 6 | 0.000907622 | 0.001254278 | 0.000560967 |
Panel b. Change in Net Charge-off rate
| Quarters Since SLOOS | Beta Estimate | Upper Bound | Lower bound |
|---|---|---|---|
| -6 | 8.50747E-05 | 0.000311855 | -0.000141706 |
| -5 | -3.83468E-05 | 0.000160855 | -0.000237548 |
| -4 | -9.97323E-05 | 7.27638E-05 | -0.000272228 |
| -3 | -0.000126388 | 1.60812E-05 | -0.000268856 |
| -2 | -0.000135925 | -2.91446E-05 | -0.000242706 |
| -1 | -8.44196E-05 | -1.72115E-05 | -0.000151628 |
| 0 | |||
| 1 | 0.000144415 | 0.00020913 | 7.97003E-05 |
| 2 | 0.000246258 | 0.0003492 | 0.000143315 |
| 3 | 0.000376323 | 0.000514716 | 0.00023793 |
| 4 | 0.000429996 | 0.000597967 | 0.000262025 |
| 5 | 0.000541431 | 0.000744528 | 0.000338333 |
| 6 | 0.000650908 | 0.000885542 | 0.000416274 |
Note: This figure plots the regression coefficients from: $$y_{b,t+h}-y_{b,t}=\beta^{h} \text{Tightening Index}_{b,t}+\gamma^{h} \text{Demand}_{b,t} +\tau^{h}_t+\epsilon^{h}_{b,t}$$ by time horizon $$h$$. Each figure plots estimates and 90% confidence intervals for $$\{\beta^{h}\}$$, where $$y$$ is the commitment-weighted average for either the estimated probability of default (top) or annual sales growth for borrowers (bottom). The sample includes Y-14 banks for the years from 2012 to 2019.
Source: Call Reports, SLOOS.
Figure 3: Trends in Risk Around a Change in Supply
Panel a. Average Probability of Default
| Quarters Since SLOOS | Beta Estimate | Upper Bound | Lower bound |
|---|---|---|---|
| -6 | -0.000885859 | -0.000202295 | -0.001569423 |
| -5 | -0.000845292 | -0.000284488 | -0.001406096 |
| -4 | -0.000775471 | -0.000320296 | -0.001230645 |
| -3 | -0.00068442 | -0.000280019 | -0.001088821 |
| -2 | -0.000435788 | -0.000116518 | -0.000755058 |
| -1 | -0.000288323 | -8.50227E-05 | -0.000491624 |
| 0 | |||
| 1 | -7.37782E-07 | 0.000148666 | -0.000150142 |
| 2 | 0.000115547 | 0.000342419 | -0.000111326 |
| 3 | 0.000218337 | 0.000497663 | -6.09898E-05 |
| 4 | 0.00010777 | 0.000458406 | -0.000242865 |
| 5 | 2.76837E-05 | 0.000457949 | -0.000402582 |
| 6 | -3.5588E-05 | 0.000440522 | -0.000511698 |
Panel b. Average Sales Growth for Borrowers
| Quarters Since SLOOS | Beta Estimate | Upper Bound | Lower bound |
|---|---|---|---|
| -6 | 0.004253665 | 0.006907553 | 0.001599778 |
| -5 | 0.003989971 | 0.006301117 | 0.001678825 |
| -4 | 0.00365165 | 0.005615838 | 0.001687463 |
| -3 | 0.002374766 | 0.004219607 | 0.000529926 |
| -2 | 0.002684655 | 0.004748988 | 0.000620322 |
| -1 | 0.001555375 | 0.002996398 | 0.000114352 |
| 0 | |||
| 1 | 0.000204901 | 0.002086227 | -0.001676426 |
| 2 | -0.000196278 | 0.001891275 | -0.002283831 |
| 3 | 0.000676298 | 0.002851094 | -0.001498499 |
| 4 | 0.001253935 | 0.003673462 | -0.001165592 |
| 5 | 0.000997699 | 0.004116532 | -0.002121133 |
| 6 | 0.000885784 | 0.003909105 | -0.002137538 |
Note: This figure plots the regression coefficients from: $$y_{b,t+h}-y_{b,t}=\beta^{h} \text{Tightening Index}_{b,t}+\gamma^{h} \text{Demand}_{b,t} +\tau^{h}_t+\epsilon^{h}_{b,t}$$ by time horizon $$h$$. Each figure plots estimates and 90% confidence intervals for $$\{\beta^{h}\}$$, where $$y$$ is the commitment-weighted average for either the estimated probability of default (top) or annual sales growth for borrowers (bottom). The sample includes Y-14 banks for the years from 2012 to 2019.
Source: Y-14Q, SLOOS.
Figure 4: Trends in C&I Lending Around a Change in Supply
Panel a. C&I loan Growth
| Quarters Since SLOOS | Beta Estimate | Upper Bound | Lower bound |
|---|---|---|---|
| -6 | -0.003005183 | 0.001721785 | -0.007732152 |
| -5 | -0.002606035 | 0.001529544 | -0.006741615 |
| -4 | -0.002342813 | 0.001233111 | -0.005918736 |
| -3 | -0.001707715 | 0.001316137 | -0.004731567 |
| -2 | -0.001307752 | 0.001013335 | -0.00362884 |
| -1 | -0.001156452 | 0.00040644 | -0.002719344 |
| 0 | |||
| 1 | -0.001227505 | 0.000289465 | -0.002744475 |
| 2 | -0.004671767 | -0.002371452 | -0.006972082 |
| 3 | -0.008074266 | -0.005094571 | -0.01105396 |
| 4 | -0.01222619 | -0.008570146 | -0.015882235 |
| 5 | -0.016670434 | -0.012446892 | -0.020893976 |
| 6 | -0.019613592 | -0.01472182 | -0.024505364 |
Panel b. C&I Origination Growth
| Quarters Since SLOOS | Beta Estimate | Upper Bound | Lower bound |
|---|---|---|---|
| -6 | 0.017225659 | 0.047112823 | -0.012661505 |
| -5 | 0.027025722 | 0.053359773 | 0.000691671 |
| -4 | 0.019368242 | 0.043078151 | -0.004341663 |
| -3 | 0.016010299 | 0.039968878 | -0.007948278 |
| -2 | 0.026011193 | 0.04533153 | 0.006690856 |
| -1 | 0.011332623 | 0.029910674 | -0.007245429 |
| 0 | |||
| 1 | -0.014620003 | 0.002970054 | -0.032210059 |
| 2 | 0.011463533 | 0.029404547 | -0.006477481 |
| 3 | 0.016443273 | 0.037567046 | -0.004680498 |
| 4 | 0.031222835 | 0.052808069 | 0.009637599 |
| 5 | 0.022002431 | 0.048382033 | -0.004377172 |
| 6 | 0.025260311 | 0.052750163 | -0.002229539 |
Note: This figure plots the regression coefficients from: $$y_{b,t+h}-y_{b,t}=\beta^{h} \text{Tightening Index}_{b,t}+\gamma^{h} \text{Demand}_{b,t} +\tau^{h}_t+\epsilon^{h}_{b,t}$$ by time horizon $$h$$. Each figure plots estimates and 90% confidence intervals for $$\{\beta^{h}\}$$, where $$y$$ is the natural logarithm of either C&I loan balances (top) or quarterly new C&I loan commitments (bottom). The sample covers the period from 1990 to 2019 in the top panel, and from 2012 to 2019 in the bottom panel.
Source: Call Reports, Y-14Q, SLOOS.
Figure 5: Asymmetries in the Relationship between C&I Growth and Supply
| Quarters Since SLOOS | Effect When Tightening | Upper Bound (Tightening) | Lower bound (Tightening) | Effect When Easing | Upper Bound (Easing) | Lower bound (Easing) |
|---|---|---|---|---|---|---|
| -6 | 0.004779567 | 0.012509 | -0.002949866 | -0.010008089 | -0.003542722 | -0.016473455 |
| -5 | 0.005105847 | 0.011848891 | -0.001637198 | -0.009532145 | -0.003913844 | -0.015150446 |
| -4 | 0.003810789 | 0.009618026 | -0.001996448 | -0.007867377 | -0.003028219 | -0.012706536 |
| -3 | 0.002718331 | 0.007640155 | -0.002203494 | -0.005682271 | -0.001637004 | -0.009727537 |
| -2 | 0.002235924 | 0.005969221 | -0.001497372 | -0.004492166 | -0.001353887 | -0.007630445 |
| -1 | 9.53574E-05 | 0.002543922 | -0.002353207 | -0.00228149 | -0.000144643 | -0.004418336 |
| 0 | ||||||
| 1 | -0.00301973 | -0.000541475 | -0.005497985 | 0.000386545 | 0.002489301 | -0.00171621 |
| 2 | -0.008326298 | -0.004460605 | -0.01219199 | -0.001401963 | 0.001598226 | -0.004402152 |
| 3 | -0.015239974 | -0.010250045 | -0.020229904 | -0.001705277 | 0.002172065 | -0.005582618 |
| 4 | -0.02193616 | -0.015689692 | -0.028182626 | -0.003668834 | 0.000919591 | -0.00825726 |
| 5 | -0.030452754 | -0.023191156 | -0.037714351 | -0.004573372 | 0.000714777 | -0.009861522 |
| 6 | -0.036276795 | -0.027759481 | -0.044794109 | -0.004986222 | 0.001088127 | -0.011060571 |
This figure plots the regression coefficients from:
$$$$ln(\text{C&I Loans})_{b,t+h}-ln(\text{C&I Loans})_{b,t} = \\ \beta_T^{h} \text{Tightening Index}^+_{b,t}+\beta_E^{h} \text{Tightening Index}^-_{b,t} + \gamma^{h} \text{Demand}_{b,t} +\tau^{h}_t+\epsilon^{h}_{b,t}$$$$
by time horizon $$h$$. The figure plots estimates and 90\% confidence intervals for $$\{\beta_T^{h}\}$$ (red diamonds) and $$\{\beta_E^{h}\}$$ (green squares) . $$\text{Tightening Index}^+_{b,t}=\max\{\text{Tightening Index}_{b,t},0\}$$ and $$\text{Tightening Index}^-_{b,t}=\min\{\text{Tightening Index}_{b,t},0\}$$. The sample covers the period from 1990 to 2019.
Source: Call Reports, SLOOS.