The Federal Reserve Senior Loan Officer Opinion Survey is a quarterly survey conducted by the Federal Reserve bank. It gathers information from senior loan officers at domestic banks and U.S. branches of foreign banks to assess changes in the supply and demand for bank loans to businesses and households. The survey helps the Federal Reserve and other policymakers better understand the credit market conditions, lending practices, and the overall health of the financial system.
The survey consists of a set of questions that cover several key areas:
- Lending standards: The survey asks loan officers about any changes in their banks' lending standards, such as the requirements for approving loans and the terms and conditions of loans.
- Loan demand: The survey inquires about changes in the demand for loans from businesses and households. This includes demand for various types of loans, such as commercial and industrial loans, commercial real estate loans, residential mortgages, and consumer loans.
- Loan pricing and terms: The survey also collects information on changes in loan pricing, such as interest rates and fees, as well as changes in the terms of loans, such as maturities, collateral requirements, and covenants.
- Special questions: Occasionally, the survey includes special questions on specific topics of interest, such as the impact of regulatory changes, the economic outlook, or other relevant issues.
The results of the Senior Loan Officer Opinion Survey provide valuable insights into the credit market conditions and help the Federal Reserve and other policymakers make informed decisions about monetary policy and financial stability.
With concerns about the regional banks and expectations of slower growth ahead, the market will be paying closer attention to see if medium-size banks tightened their lending standards. That would in effect do additional tightening for the Fed, and give them some leeway to potentially pause future tightening.
In the last survey (for the 4Q 2022) 44.7% of the medium sized banks tightened their lending standards with 3.1% saying they tightened considerably and 40.6% reporting tightened somewhat and 56.2% remained basically unchanged from the prior survey.
In the October survey those numbers were 6.1% and 27.3% (or 33.4%) for tightened considerably and tightened somewhat, and 66.7% basically unchanged.
What did the same survey look like in the 1Q of 2022?
Looking at the numbers below, the medium-size banks had 9.4% said that they tightened somewhat well 84.4% said that they were unchanged and 6.2% said they eased credit conditions somewhat. The Federal Reserve started their tightening process in March 2022.
Of course the data is compared to the previous quarter. With 44.7% either tightening or tightening considerably in the 4Q, there's always the chance that the tightening has already been done. So there may be more unchanged in the mix. However, if the numbers for tightening are larger than last quarter, that would indicate that the tightening process is getting even more restrictive.
As mentioned above there are a number of other survey results that would be eyed for "tightening somewhat" and "tightening considerably". As a result, there will be a lot of combing through the data and analyzing the results.
You can find the last quarter results by clicking here.