-1-Table 1SPECIAL SENIOR LOAN OFFICER OPINION SURVEY ON BANK LENDING PRACTICESAT SELECTED LARGE BANKS IN THE UNITED STATES(StatusofpolicyasofMarch2001
1
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Conditionsinfinancialmarketshavechangedinseveralimportantwayssincethebeginningoftheyear,includingtwomonetaryeas- ings by the Federal Reserve and changes in some market risk premiums. We are interested in developments in the supply of and demand for
commercial and industrial
(C&I) loans at your bank over this period. Questions 1-3 deal with changes in your bank’s lending policies since the beginning of the year. Questions 4-5 deal with changes in demand for C&I loans over the same period. If yourbank’slendingpolicieshavenotchangedsincethebeginningoftheyear,pleasereportthemasunchangedevenifthepolicies areeitherrestrictiveoraccommodativerelativetolonger-termnorms.Ifyourbank’spolicieshavetightenedoreasedoverthisperiod,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. Since the beginning of the year, 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? (Ifyour 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)B. Standards for small firms (annual sales of less than $50 million)1. The sample is selected from among the largest banks in each Federal Reserve District. In the table, large banks aredefined as those with total domestic assets of $20 billion or more as of September 30, 2000. The combined assets of the30 large banks totaled $2.53 trillion, compared to $2.77 trillion for the entire panel of 54 banks, and $5.29 trillion for alldomestically chartered, federally insured commercial banks.All RespondentsLarge BanksOther BanksBanksPctBanksPctBanksPctTightened considerably1 1.91 3.30 0.0Tightened somewhat27 50.014 46.713 54.2Remained basically unchanged26 48.115 50.011 45.8Eased somewhat0 0.00 0.00 0.0Eased considerably0 0.00 0.00 0.0Total54100.030100.024100.0All RespondentsLarge BanksOther BanksBanksPctBanksPctBanksPctTightened considerably0 0.00 0.00 0.0Tightened somewhat23 43.411 37.912 50.0Remained basically unchanged30 56.618 62.112 50.0Eased somewhat0 0.00 0.00 0.0Eased considerably0 0.00 0.00 0.0Total53100.029100.024100.0
-2-2.ForapplicationsforC&Iloansorcreditlines--otherthanthosetobeusedtofinancemergersandacquisitions--fromlargeandmid-dle-marketfirmsandfromsmallfirmsthatyourbankcurrentlyiswillingtoapprove,howhavethetermsofthoseloanschangedsincethebeginningoftheyear?(Pleaseassigneachtermanumberbetween1and5usingthefollowingscale:1=tightenedconsiderably,2=tightened somewhat, 3=remained basically unchanged, 4=eased somewhat, 5=eased considerably.)A. Terms for large and middle-market firms (annual sales of more than $50 million)B. Terms for small firms (annual sales of less than $50 million)All RespondentsLarge BanksOther BanksMeanMeanMeanMaximum size of credit lines2.552.552.54Costs of credit lines2.552.412.71Spreads of loan rates over your bank’s cost of funds (widerspreads=tightened, narrower spreads=eased)2.532.412.67Premiums charged on riskier loans2.192.172.21Loan covenants2.472.382.58Collateralization requirements2.512.482.54Other2.962.933.00Number of banks responding532924All RespondentsLarge BanksOther BanksMeanMeanMeanMaximum size of credit lines2.712.712.71Costs of credit lines2.752.752.75Spreads of loan rates over your bank’s cost of funds (widerspreads=tightened, narrower spreads=eased)2.692.712.67Premiums charged on riskier loans2.332.432.21Loan covenants2.632.642.63Collateralization requirements2.622.682.54Other2.942.893.00Number of banks responding522824
-3-3.IfyourbankhastightenedoreaseditscreditstandardsoritstermsforC&Iloansorcreditlinessincethebeginningoftheyear(asdescribedinquestions1and2),howimportanthavebeenthefollowingpossiblereasonsforthechange?(PleaserespondtoeitherA,B,orbothasappropriateandrateeachpossiblereasonusingthefollowingscale:1=notimportant,2=somewhatimportant,3=veryimportant.)A. Possible reasons for tightening credit standards or loan termsB. Possible reasons for easing credit standards or loan termsAll RespondentsLarge BanksOther BanksMeanMeanMeanDeterioration in your bank’s current or expected capital position1.151.001.33Less favorable or more uncertain economic outlook2.482.412.56Worsening of industry-specific problems2.232.232.22Less aggressive competition from other banks1.301.361.22Less aggressive competition from nonbank lenders (other financialintermediaries or the capital markets)1.181.181.17Reduced tolerance for risk2.182.142.22Decreased liquidity in the secondary market for these loans1.631.681.56Increase in defaults by below-investment-grade borrowers in publicdebt markets.1.851.911.78Other1.201.361.00Number of banks responding402218All RespondentsLarge BanksOther BanksMeanMeanMeanImprovement in your bank’s current or expected capital position1.000.001.00More favorable or less uncertain economic outlook1.000.001.00Improvement in industry-specific problems1.000.001.00More aggressive competition from other banks2.500.002.50More aggressive competition from nonbank lenders (other financialintermediaries or the capital markets)2.000.002.00Increased tolerance for risk1.000.001.00Increased liquidity in the secondary market for these loans1.000.001.00Other1.000.001.00Number of banks responding202
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US Federal Reserve: table1
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