Economy
May 9, 2014
Bank Lending Practices- April 2014
Written by Peter Wright
The April 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months. This summary is based on the responses from 74 domestic banks and 23 U.S. branches and agencies of foreign banks. The following is an abridged version of the Federal Reserve report followed by SMU comments and graphs.
Questions on commercial and industrial lending: A small net percentage of domestic survey respondents reported having eased standards on C&I loans, both to large and middle-market firms and to small firms. Larger fractions of banks reported easing terms on C&I loans on net. Of the terms included in the survey, banks reported the most widespread easing on spreads of C&I loan rates over banks’ costs of funds. In addition, for all firm sizes, banks reported having reduced the cost of credit lines, decreased the use of interest rate floors, eased loan covenants, and reduced risk premiums.
