FR2023_20150527_omb

Supporting Statement for the
Senior Financial Officer Survey
(FR 2023; OMB No. 7100-0223)
Summary
The Board of Governors of the Federal Reserve System, under delegated authority from
the Office of Management and Budget (OMB) proposes to extend for three years, without
revision, the voluntary Senior Financial Officer Survey (FR 2023; OMB No. 7100-0223). The
Federal Reserve uses this survey to collect qualitative and limited quantitative information about
liability management, the provision of financial services, and the functioning of key financial
markets from a selection of up to 80 large commercial banks (or, if appropriate, from other
depository institutions or major financial market participants). Consistent with the Senior Loan
Officer Opinion Survey on Bank Lending Practices (FR 2018; OMB No. 7100-0058), a senior
officer at each respondent bank completes this voluntary survey usually through an electronic
submission. Although the survey may not be collected in a given year, authority is requested to
conduct it up to four times per year when major informational needs arise and cannot be met
from existing data sources.
The annual burden for the FR 2023 survey is estimated to be 960 hours, based on four
surveys per year. The survey does not have a fixed set of questions; each survey consists of a
limited number of questions directed at topics of timely interest. Accordingly, a sample form is
not included with this proposal.
Background and Justification
The Federal Reserve uses the Senior Financial Officer Survey to obtain information about
deposit pricing and behavior, bank liability management, the provision of financial services, and
reserve management practices. The survey helps pinpoint developing trends in bank funding
practices, enabling the Federal Reserve to distinguish these trends from transitory phenomena. It
also complements other deposit reports that, by themselves, provide limited insight into the
causes of the changing behavior of deposit holders and depository institutions. Moreover, the
survey has given the Federal Reserve the opportunity to follow periodic developments in
financial markets related to extraordinary events that are beyond the scope of other reports.
In February 1994, a survey requested information about the availability and profitability
of providing brokerage services to retail customers and the provision of non-brokerage services
to mutual funds. This survey found evidence that large banks were continuing to expand their
retail brokerage programs and helped quantify the importance of these activities for bank
profitability. Another survey conducted in December 1994 focused on bank funding practices.
Results from this survey helped identify factors that explained banks’ increased reliance on
managed liabilities to fund domestic credit. In May 1996, a survey was designed and conducted
to investigate bank reserve management practices in order to increase understanding of how
banks might operate with low required reserve balances. Information from this survey assisted
in the smooth implementation of monetary policy as sweep accounts drove down the level of
required operating balances.

A survey conducted in May 1998 was designed to gauge the effect on banks’ reserve
management of the imposition of a charge on banks that overdraw their accounts at the Federal
Reserve during the course of the day (the so-called daylight overdraft fee) and the expansion of
the operating hours of the Fedwire system. The survey documented the tendency of banks to
concentrate delivery of federal funds later in the day, potentially in response to changes in the
Federal Reserve’s intraday credit policy. This survey also confirmed previous anecdotal
evidence that banks used the extension of Fedwire operating hours to transfer funds linked not
only to international transactions, which was expected, but also to domestic transactions.
In August 2006, information was collected on a Senior Financial Officer Survey to assess
the use of retail sweep programs. The results were not published. Respondents almost
uniformly indicated that their banks would not eliminate retail sweep programs or change vault
cash management strategies in response to payment of interest on reserves in the 1996 and 1998
surveys, respondents had indicated more willingness to alter their behavior.
As illustrated by these examples, the Senior Financial Officer Survey has assisted the
Federal Reserve in its assessment of bank behavior and financial market conditions by improving
knowledge of institutional arrangements and by permitting prompt inquiries in response to
unusual circumstances. Information collected through the survey has also been used by the
Federal Open Market Committee and has contributed to the formulation of monetary policy.
In 2012, the minimum asset size for panel institutions was reduced from $3 billion to $2
billion and 20 domestically chartered commercial banks with $2 to $10 billion in total assets
were added to the authorized panel. The expanded panel provides a more comprehensive picture
of differences in funding conditions at the largest banks and regional banks, and deeper coverage
of banks that lend in commercial real estate and small business markets.
Description of Information Collection
Both the frequency and the content of the Senior Financial Officer Survey have been, and
will continue to be, determined by exigencies. Hence, it is difficult for the Federal Reserve to
stipulate the exact nature, type, or timing of future surveys. In the past, surveys have been
conducted at irregular intervals and have included both qualitative and quantitative questions.
The Federal Reserve recommends no change in the frequency of this report.
Reporting Panel
Domestically Chartered Commercial Banks. The primary panel of respondents,
identical to the U.S. commercial bank subset of respondents for the Senior Loan Officer Opinion
Survey, currently comprises 78 large, domestically chartered commercial banks.1 To ensure
1

The Federal Reserve tries to maintain the full authorized panel of 80 insured, domestically chartered commercial
banks on the FR 2018. The panel is heavily weighted towards large complex banking organizations, but also
includes a fair number of large and medium-sized regional banks, which allows for a greater diversity of responses
and provides a broader view of the banking system. In addition, the FR 2018 reporting panel also has a subset
composed of large U.S. branches and agencies of foreign banks. These institutions are not included in the primary
FR 2023 panel because most of their funding operations are in the wholesale, not retail, market or in their home

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adequate geographic coverage, the survey panel spans all Federal Reserve Districts. As of June
30, 2014, the assets of the panel banks totaled $8.7 trillion and accounted for about 62 percent of
the $14.0 trillion in total assets at domestically chartered institutions. The overlap between the
reporting panels of the FR 2018 and FR 2023 surveys aids the Federal Reserve in interpreting the
data received.
Optional Panel. The panel of large domestically chartered commercial banks would be
appropriate for most survey topics. In some situations, however, panels based on alternative
criteria may be more appropriate or may provide useful additional information. Consequently,
the Federal Reserve has the option to survey other types of respondents (such as other depository
institutions, bank holding companies, or other financial entities) in addition to the current panel.
For example, it may be useful to survey institutional loan investors to gain a better understanding
of how that part of the syndicated loan market works. This option enhances the potential scope
and utility of the survey and is consistent with the FR 2018. Also consistent with the FR 2018,
the surveys of optional panels would be conducted either by the Reserve Bank or the Federal
Reserve Board, as appropriate.
Time Schedule for Information Collection and Publication
The survey may be conducted up to four times per year. In 1994, two surveys were
conducted that assisted the Federal Reserve in its assessment of bank behavior and financial
market conditions. Since then, only three surveys have been conducted (in May 1996, May
1998, and August 2006), as there were no circumstances requiring more frequent surveys.
However, such circumstances could arise in the future and the Federal Reserve believes that the
authority to conduct up to four surveys a year is essential in order for the Federal Reserve to
maintain the ability to keep abreast of important market developments.
To the extent possible, the Federal Reserve notifies respondents in advance as to the
topic(s) to be covered in an impending survey. In extraordinary circumstances, when such notice
is not possible, the decision to waive this advance notice provision would be made only by
Federal Reserve Board officials. The survey is generally completed through electronic
submission by a senior financial officer at each respondent bank. If they prefer, banks also have
the option of responding through a telephone interview conducted either by a Reserve Bank
officer or senior-level Federal Reserve Board staff member who has expertise in the area of bank
liability management, or by a Federal Reserve Board staff member, as appropriate.
Survey responses are tabulated and summarized at the Federal Reserve Board. Summary
data are forwarded to Reserve Banks for distribution to respondents and also are available to
other members of the public.2

countries. However, should the need arise, U.S. branches and agencies could be surveyed as an optional panel.
2

As noted above, information was collected on an August 2006 survey, but that survey was not completed or
published.

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Legal Status
The Board’s Legal Division has determined that the survey is authorized by sections 2A,
11, and 12A of the Federal Reserve Act (12 U.S.C. §§ 225a, 248(a), and 263) and is voluntary.
The ability of the Federal Reserve to maintain the confidentiality of information provided by
respondents to the FR 2023 surveys will be determined on a case by case basis depending on the
data collected under a particular survey. The individual survey responses from each respondent
can be held confidential under section (b)(4) of the Freedom of Information Act (5 U.S.C. §
552(b)(4)).
Consultation Outside the Agency
On February 11, 2015, the Federal Reserve published a notice in the Federal Register
(80 FR 7592) requesting public comment for 60 days on the extension, without revision, of the
FR 2023. The comment period for this notice expired on April 13, 2015. The Federal Reserve
did not receive any comments. On April 27, 2015, the Federal Reserve published a final notice
in the Federal Register (80 FR 23274).
Estimate of Respondent Burden
As shown below, the total annual burden for the FR 2023 is estimated to be 960 hours,
based on four surveys per year.3 The reporting requirements represent less than 1 percent of total
Federal Reserve System annual paperwork burden.
Number of
respondents4
FR 2023

80

Estimated
Annual
average hours
frequency
per response
4
3

Estimated
annual burden
hours
960

The total cost to the public is estimated to be $49,680.5
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.

3

Actual burden underlying the average per hour response time varies considerably not only from survey to survey,
depending on the number and nature of the questions, but also among respondents for any one survey.
4
Of these respondents required to comply with this information collection, none are considered small entities as
defined by the Small Business Administration (i.e., entities with less than $550 million in total assets)
www.sba.gov/content/small-business-size-standards.
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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $17, 45% Financial Managers at
$63, 15% Lawyers at $64, and 10% Chief Executives at $87). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2014, published March 25, 2015, www.bls.gov/news.release/ocwage.nr0.htm. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/.

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Estimate of Cost to the Federal Reserve System
The cost to the Federal Reserve System for processing this report is negligible.

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