FR2023_202103_survey

March 2021
Senior Financial Officer Survey

BOARD

OF

GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

Summary
In March 2021, the Federal Reserve conducted a Senior Financial Officer Survey (SFOS) to
gather views systematically from a number of banks on reserve management experiences in
recent months and about expectations for reserve and balance sheet management in the
months ahead. In addition, the survey gathered views on certain Federal Reserve liquidity
facilities and included new questions on wholesale funding market activity and the potential
for additional investment in high-quality liquid assets (HQLA).
As in previous surveys, the banks sampled in the March SFOS represented a wide range of
asset sizes and business models. The survey panel comprised 49 domestic banks and 31 foreign banking organizations (FBOs), which, in aggregate, held roughly three-fourths of total
reserve balances in the banking system at the time of the survey.1 The Federal Reserve distributed the survey to senior financial officers at these banks on March 19, 2021, with replies due
by April 2, 2021.2 Responses were received from all 80 banks.
Key takeaways from the survey included the following:
• About 40 percent of respondents whose bank had participated in the September 2020
SFOS reported their bank’s average end-of-day reserve balance level grew between August
and December 2020 by more than the expectations they reported in the earlier survey.
Among these respondents, a larger-than-expected deposit inflow was by far the factor most
commonly cited as the most or second most important driver that led to the greater-thanexpected reserve balances.
• Almost 40 percent of respondents expect their bank’s average end-of-day reserve level in
June 2021 to be stable relative to the level in February 2021. The remaining respondents
were roughly evenly split between those who expect their bank’s reserve balances to increase
and those who expect balances to decrease.
—One-half of the respondents expect their bank would take no specific actions to adjust
the level or growth of its reserve balances to reach the expected level in June, while a
slightly smaller number of respondents expect their bank to take actions to reduce either
the level or growth of its reserve balances.
• One-third of respondents reported their bank is already taking action to limit the size of its
balance sheet and expect their bank to continue to do so. Another one-third reported their
bank would take action to preserve or reduce the size of its balance sheet if it grew. The
remaining respondents reported their bank would not limit the size of its balance sheet
regardless of growth.
—Among the two-thirds of respondents who reported their bank is limiting, or would limit
under certain growth assumptions, the size of its balance sheet, almost half rated net
interest margin pressure and return on assets as important or very important factors in
that decision. These same respondents cited allowing outstanding wholesale funding
liabilities to mature without replacement and reducing deposit rates on non-operational

1

2

The FBOs consisted of U.S. branches and agencies of foreign banks as well as one U.S. commercial bank that
exhibited reserve management behavior more akin to this group than to similarly sized domestic banks.
Respondents were asked to specify the reserve holding entities that were covered in their survey responses.

1

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March 2021 Senior Financial Officer Survey

deposits as the most likely liability adjustments that would be used to reduce the level or
growth of the balance sheet.
• About one-fourth of respondents reported their bank would increase overnight unsecured
borrowing if short-term interest rates fell relative to the interest on excess reserves (IOER)
rate. The remaining respondents reported their bank either did not engage in such borrowing or would not increase its borrowing even if short-term interest rates fell more than
10 basis points relative to the IOER rate.
• A large majority of respondents indicated their bank would be willing to borrow discount
window primary credit only if other funding sources became less available due to marketwide conditions.
• Some respondents reported that the availability of funding from the Paycheck Protection
Program Liquidity Facility (PPPLF) has increased the willingness or ability of their bank—
including some banks that have not participated in the PPPLF—to make Paycheck Protection Program (PPP) loans.
The remainder of this summary is organized into three parts that reflect the structure of the
survey, and the summary is followed by a detailed tabular presentation of responses.3

Part I: Reserve Balance Management Strategies and Practices
(Questions 1–3)
Questions on reserve balance levels. The first two questions in Part I asked respondents about
increases in their bank’s average end-of-day reserve balances and the factors driving those
increases.
The first part of the first question, answered only by the 76 respondents whose bank also participated in the September 2020 SFOS, asked how their bank’s average end-of-day reserve
balance level in December 2020 changed relative to the level in August 2020 and how their
firm’s experiences compared with the expectations they expressed in the earlier survey. Of
these respondents, 31—about 40 percent—reported their bank’s actual average end-of-day
reserve balance level grew by more than they predicted in the September SFOS. Domestic
bank respondents were much more likely than FBO respondents to report their bank’s
reserves had grown by more than expected.
In the second part of the first question, the 31 respondents who reported their bank’s
reserves grew by more than they predicted in the September SFOS were asked to rank, in
order of importance, the drivers that lead to the higher-than-expected growth. Of these
respondents, 80 percent (25 of the 31) reported that a larger-than-expected deposit inflow was
the most or second most important driver. Of these same respondents, 14—about 45 percent—indicated that a lack of attractive alternative investments relative to previous expectations was the most or second most important driver, while 12—about 40 percent—cited
lower-than-expected deposit runoff rates.

3

For the most part, the instructions and survey questions presented in each table are the same as the ones distributed to the respondents, with minor adjustments to enhance clarity. As not all respondents answered every question, the number of respondents answering each question is reported in the accompanying data tables.

3

The first part of the second question asked by how much respondents expect their bank’s
average end-of-day reserve level in June 2021 to change relative to the average end-of-day
reserve balance in February 2021.4 About 40 percent of respondents (31 of 80) expect their
bank to maintain stable reserve levels over this period, and the remaining respondents were
evenly split between those who expect an increase in reserve balances and those who expect a
decrease. FBO respondents were much more likely than domestic bank respondents to report
that they expect their bank’s reserves to remain stable.
In the second part of the question, respondents were asked how they expect their bank to
reach the reserve level predicted in the first part of the question. Half of the respondents—
including a large majority of the FBO respondents—expect their bank would take no specific
actions to adjust the level or growth of its reserve balances. A slightly smaller number of
respondents (36 of 80) expect their bank to take actions to reduce either the level or growth of
its reserve balances, while only a few respondents expect their bank to take actions to increase
reserves.
The third part of the second question asked the 36 respondents who expect their bank to take
actions to reduce the level or growth of its reserve balances to rank, in order of importance,
the factors that could prompt their bank to seek to do so. More than half of these respondents (20 of the 36) reported that concern over net interest margins was the most or second
most important factor, and nearly as many cited an increase in the expected return of alternative HQLA Level 1 investments relative to the IOER rate.5
As the responses to the first three parts of the second question may depend on the outlook
for short-term interest rates, the fourth part of the question asked respondents to characterize
their bank’s assumptions for the constellation of short-term rates relative to the IOER rate. A
little more than half of the respondents reported that the constellation of short-term interest
rates relative to the IOER rate does not meaningfully affect their bank’s outlook for reserve
management in the next few months. In addition, more than one-third expect the constellation to remain, on average, the same as in February 2021. Only a few respondents whose
bank’s outlook for reserve management is meaningfully affected by the constellation of
short-term interest rates expect those rates to decrease or increase.
Question on balance sheet expansion. The third question in Part I asked respondents about
their institution’s entire balance sheet and about the way their institution may react if its balance sheet expanded over the next several months.
The first part of the third question asked for the level of growth at which the respondent’s
institution would take action to preserve or reduce the size of its balance sheet relative to the
size on December 31, 2020. One-third of respondents (27 of 80) reported that their institution is already taking action to limit the size of its balance sheet and that they expect their
institution to continue to limit the size of the balance sheet regardless of the level of balance
sheet growth, while another one-third (27 of 80) reported that their institution would take

4

5

To provide additional context for respondents, the survey question referenced the results of the Federal Reserve’s
January 2021 Survey of Primary Dealers, which showed dealer expectations that the Federal Reserve would purchase on net an additional $480 billion of U.S. Treasury securities and agency mortgage-backed securities between
the beginning of March and the end of June 2021. This projection would be, all else being equal, consistent with
continued growth of reserves in the banking system.
Level 1 HQLA are defined in section 249.20 of Regulation WW (Liquidity Risk Measurements Standards).

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March 2021 Senior Financial Officer Survey

action to limit the size of its balance sheet if it grew. The remaining respondents reported that
their institution would not take action to limit the size of its balance sheet.
In the second part of the question, the 54 respondents who reported their bank is limiting, or
would limit under certain growth assumptions, the size of its balance sheet were asked to rate
the factors that would prompt their bank to seek to reduce its balance sheet. Net interest margin pressure and return on assets were rated as important or very important by almost half of
the respondents (26 of 54 and 25 of 54, respectively), while regulatory factors were less often
cited as important or very important.
The third part of the third question asked the same 54 respondents who answered the previous part of the question to rate the likelihood that their bank would use specific liability
adjustments to reduce the level or growth of its balance sheet if warranted. Among these
respondents, the most likely adjustments are allowing outstanding wholesale funding liabilities to mature without replacement, cited as “very likely” by 30 respondents, and reducing
deposit rates on non-operational deposits, cited as very likely by 29 respondents.

Part II: Overnight Wholesale Funding Market Activity
(Questions 4–5)
Questions on considerations that motivate banks’ activity in overnight wholesale funding markets. Respondents were asked to explain the considerations that motivate their bank’s activity
in overnight wholesale funding markets such as those for federal funds, Eurodollars, and
repurchase agreements (repos).6
The fourth question asked respondents to provide the approximate additional volume of
overnight unsecured borrowing their institution would conduct if short-term interest rates fell
relative to the IOER rate. Banks earn the IOER rate on reserves, and a decline in short-term
borrowing rates relative to the IOER rate would, all else being equal, permit banks to earn
greater amounts by borrowing at the lower rates and holding the proceeds as reserves.
Twenty-five respondents reported their bank does not engage in overnight unsecured borrowing. Of the remaining 55 respondents, 21 indicated their bank would increase such borrowing
if the overnight bank funding rate (OBFR), a representative short-term interest rate, fell relative to the IOER rate. However, the remaining 34 respondents reported their bank would not
increase such borrowing even if the IOER–OBFR rate spread widened more than 10 basis points.
As noted earlier, banks earn the IOER rate on reserves. The fifth question asked respondents
for the level of returns, measured as the spread over the IOER rate, that would be needed for
their institution to invest in certain high-quality assets including short- and longer-dated
Treasury securities and overnight reverse repurchase agreements collateralized by such securities (Treasury reverse repos). A large majority of respondents (66 of 80) reported that their
institution would be willing to invest in Treasury reverse repos at spreads of 0 to 10 basis
points above the IOER rate, and a smaller majority (47 of 80) reported that their institution
would be willing to invest in short-dated Treasury securities (defined as those with remaining
maturity of one year or less) at the same spreads. The returns required to induce investment
in longer-term Treasury securities were generally much higher. In particular, of the respon-

6

Respondents whose banks are affiliated with a broker-dealer were instructed to not include the normal financing
activity of the broker-dealer for the purposes of the questions.

5

dents who reported their bank’s willingness to invest in longer-dated Treasury securities
(defined as those with remaining maturity of greater than five years), a majority (36 of
56) indicated that a spread of more than 50 basis points over the IOER rate would be needed.

Part III: Federal Reserve Facilities
(Questions 6–9)
Question on banks’ view of the discount window. In March 2020, the Federal Reserve
announced changes to the discount window and encouraged depository institutions to use
the discount window to meet unexpected funding needs and support the flow of credit to
households and businesses.
The sixth question of the survey asked respondents to characterize their bank’s willingness to
borrow discount window primary credit under its existing terms. While a small number of
respondents (7 of 80) reported that their bank would be willing to borrow primary credit if
other funding sources are more expensive, twice as many reported willingness to borrow only
if other funding sources became less available due to a firm-specific strain, and a large majority (50 of 80) of respondents’ banks would be willing to borrow only if other funding sources
became less available due to market-wide conditions.
Questions on participation in the Paycheck Protection Program Liquidity Facility. The survey’s
final three questions gathered information about the Federal Reserve’s PPPLF, which provides term funding to institutions that are eligible to originate loans under the Small Business
Administration’s PPP.
The seventh question asked respondents whether their bank had originated or purchased
loans authorized under the PPP. Of the 80 respondents, 44 reported their bank had done so.
Almost all respondents who reported participation in the PPP are from domestic banks.
The eighth question asked those 44 respondents whose bank participated in the PPP to
describe their bank’s view of the PPPLF. Of these respondents, 13—30 percent—reported
their bank has borrowed from the PPPLF, and of these, 4 indicated that the availability of
funding from the PPPLF increased or was essential to their bank’s willingness or ability to
make PPP loans. Among the 31 respondents whose bank has made PPP loans but has not
participated in the PPPLF, 4 reported that the availability of funding from the PPPLF
increased their bank’s willingness or ability to make PPP loans even though their bank did
not take advantage of it.
The ninth question asked those respondents whose bank participated in the PPPLF in 2020
but has not taken out PPPLF advances collateralized by PPP loans made in 2021 for the reasons for their decisions regarding the PPPLF in 2021. All eight respondents who replied to
this question indicated that lower funding needs than in 2020 were an important or very
important factor in their bank’s decision.
This document was prepared by Courtney Demartini, Lyle Kumasaka, Matthew Malloy, and Abigail
Roberts, Division of Monetary Affairs, Board of Governors of the Federal Reserve System; and
Samuel Kanson-Benanav, Roseanna Levy, Jason Miu, and Anna Tikonoff, Federal Reserve Bank of
New York.

Results
The following results include the instructions provided to the survey respondents. Please note
that percentages are based on the number of financial institutions that gave responses other
than “not applicable.” Components may not sum to totals because of rounding. Themes or
observations highlighted in written commentary may only be summarized when they are
(1) not duplicative of answer options provided elsewhere in the question and (2) indicated by
three or more respondents.

Part I: Reserve Balance Management Strategies and Practices
The September 2020 SFOS asked respondents about their expectations for how their individual firm’s average end-of-day reserve balance level in December 2020 would change relative to their firm’s average end-of-day reserve balance level in August 2020.7 Question 1 asks
respondents about this period and how their experiences compared to expectations expressed
in the September 2020 SFOS.
If you did not participate in the September 2020 SFOS, please skip to question 2.
1.
A. Did your institution’s actual average end-of-day reserve balance level grow between
August and December 2020 by more than your firm’s expectations reported in question 3.A of the September 2020 SFOS? [yes/no]

Yes
No
Total

All respondents

Domestic

Foreign

31
45
76

24
21
45

7
24
31

If you answered no to question 1.A, please skip to question 2.
B. If you answered yes to question 1.A, please rank, in the order of their importance,
the drivers that led to greater average end-of-day reserve balances in December relative to your expectations from those listed in the following table from 1 (least important) to 5 (most important). If an important driver is not listed, please indicate in the
comment box.

7

See September 2020 Senior Financial Officer Survey, available: https://www.federalreserve.gov/data/sfos/sep-2020senior-financial-officer-survey.htm.

7

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March 2021 Senior Financial Officer Survey

i. Lack of attractive alternative investment opportunities relative to my firm’s
expectations
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

3
7
7
7
7
31

9.7
22.6
22.6
22.6
22.6
100.0

2
6
7
6
3
24

8.3
25.0
29.2
25.0
12.5
100.0

1
1
0
1
4
7

14.3
14.3
0.0
14.3
57.1
100.0

ii. A larger inflow of deposits relative to my firm’s expectations
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

1
0
5
5
20
31

3.2
0.0
16.1
16.1
64.5
100.0

1
0
3
2
18
24

4.2
0.0
12.5
8.3
75.0
100.0

0
0
2
3
2
7

0.0
0.0
28.6
42.9
28.6
100.0

iii. My firm’s deposit base had a lower runoff rate than expected
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

7
7
5
10
2
31

22.6
22.6
16.1
32.3
6.5
100.0

4
7
2
9
2
24

16.7
29.2
8.3
37.5
8.3
100.0

3
0
3
1
0
7

42.9
0.0
42.9
14.3
0.0
100.0

iv. Actual loan demand during this period was smaller than expected
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

2
11
11
7
0
31

6.5
35.5
35.5
22.6
0.0
100.0

2
6
10
6
0
24

8.3
25.0
41.7
25.0
0.0
100.0

0
5
1
1
0
7

0.0
71.4
14.3
14.3
0.0
100.0

9

v. A need to provide a larger buffer against general economic or operational uncertainty relative to my firm’s expectations
All respondents

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

18
6
3
2
2
31

58.1
19.4
9.7
6.5
6.5
100.0

15
5
2
1
1
24

62.5
20.8
8.3
4.2
4.2
100.0

3
1
1
1
1
7

42.9
14.3
14.3
14.3
14.3
100.0

1 (Least important)
2
3
4
5 (Most important)
Total

Written responses generally reinforced or elaborated on views that had already
been expressed.
2. Question 2 asks about your institution’s expectations for how its reserve balance position
may change over the next several months. For context, the results of the January Survey
of Primary Dealers showed dealer expectations for the total amount of the Federal
Reserve’s net purchases of U.S. Treasury securities and agency MBS by dealers between
the beginning of March to the end of June 2021 was $480 billion.8 All else equal, these
projections are consistent with continued growth of reserve balances in the banking
system.
A. By how much do you expect your institution’s average end-of-day reserve level in
June 2021 to change relative to the average end-of-day reserve balance your institution held in February 2021? (select one).
All respondents

I. A decrease of greater than 50%
II. A decrease of between 26% and 50%
III. A decrease of between 6% and 25%
IV. Stable reserves (plus or minus 5%)
V. An increase of between 6% and 25%
VI. An increase of between 26% and 50%
VII. An increase of greater than 50%
Total

8

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

0
6
19
31
19
2
3
80

0.0
7.5
23.8
38.8
23.8
2.5
3.8
100.0

0
5
15
12
12
2
3
49

0.0
10.2
30.6
24.5
24.5
4.1
6.1
100.0

0
1
4
19
7
0
0
31

0.0
3.2
12.9
61.3
22.6
0.0
0.0
100.0

Based on the sum of the medians of dealers’ modal expectations for the monthly amount of net purchases of U.S.
Treasury securities and agency MBS. https://www.newyorkfed.org/medialibrary/media/markets/survey/2021/jan2021-spd-results.pdf.

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March 2021 Senior Financial Officer Survey

B. To reach the reserve levels that you expected in question 2.A, do you expect your
institution will (select one):
All respondents

I. Take actions to reduce either the level or
growth in your reserve balances
II. Not take specific actions to adjust the
level or growth in your reserve balances
III. Take actions to increase either the level
or growth in your reserve balances
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

36

45.0

33

67.3

3

9.7

41

51.2

16

32.7

25

80.6

3
80

3.8
100.0

0
49

0.0
100.0

3
31

9.7
100.0

If you answered II or III to question 2.B, please skip to question 2.D.
C. If you selected I in question 2.B, what factors do you anticipate could prompt your
institution to seek to reduce the level or growth of your reserve balance position to
reach the levels expected in question 2.A? Please rank, in the order of their importance, the factors from 1 (least important) to 5 (most important). If an important
factor for your institution is not listed, please provide it in the comment box.
i. An assessment that the existing deposit base will have lower runoff rates than is
currently expected
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

9
4
9
6
8
36

25.0
11.1
25.0
16.7
22.2
100.0

7
4
9
5
8
33

21.2
12.1
27.3
15.2
24.2
100.0

2
0
0
1
0
3

66.7
0.0
0.0
33.3
0.0
100.0

ii. An increase in the expected return on alternative HQLA level 1 investments relative to IOER
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

4
6
8
8
10
36

11.1
16.7
22.2
22.2
27.8
100.0

3
5
8
8
9
33

9.1
15.2
24.2
24.2
27.3
100.0

1
1
0
0
1
3

33.3
33.3
0.0
0.0
33.3
100.0

11

iii. Expected resumption of loan demand from creditworthy borrowers
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

10
14
6
3
3
36

27.8
38.9
16.7
8.3
8.3
100.0

10
13
5
3
2
33

30.3
39.4
15.2
9.1
6.1
100.0

0
1
1
0
1
3

0.0
33.3
33.3
0.0
33.3
100.0

iv. A desire to preserve or decrease balance sheet size
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

11
6
5
7
7
36

30.6
16.7
13.9
19.4
19.4
100.0

11
5
5
5
7
33

33.3
15.2
15.2
15.2
21.2
100.0

0
1
0
2
0
3

0.0
33.3
0.0
66.7
0.0
100.0

v. Concern about net interest margins
All respondents

1 (Least important)
2
3
4
5 (Most important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

2
6
8
12
8
36

5.6
16.7
22.2
33.3
22.2
100.0

2
6
6
12
7
33

6.1
18.2
18.2
36.4
21.2
100.0

0
0
2
0
1
3

0.0
0.0
66.7
0.0
33.3
100.0

Written responses generally reinforced or elaborated on views that had already
been expressed.
D. To the extent that your responses to questions 2.A through 2.C are conditioned on
your institution’s outlook for short-term interest rates relative to IOER over this

12

March 2021 Senior Financial Officer Survey

period, please indicate which statement best characterizes your assumptions for the
constellation of short-term rates relative to IOER, on average, in February 2021:
All respondents

I. The constellation of short-term interest
rates relative to IOER does not meaningfully affect our outlook for reserve management in the next few months.
II. We expect the constellation of short-term
rates relative to IOER to decrease,
increasing the attractiveness of holding
reserve balances, all else equal.
III. We expect the constellation of
short-term rates relative to IOER to
increase, decreasing the attractiveness
of holding reserve balances, all else
equal.
IV. We expect the constellation of
short-term rates relative to IOER remain,
on average, the same as February 2021.
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

42

52.5

31

63.3

11

35.5

6

7.5

3

6.1

3

9.7

1

1.3

1

2.0

0

0.0

31
80

38.8
100.0

14
49

28.6
100.0

17
31

54.8
100.0

3. Question 3 asks about your institution’s entire balance sheet and how your institution
may act if its balance sheet expanded over the next several months.
A. At what level of growth would your institution take action to preserve or reduce the
size of your balance sheet relative to its size on December 31, 2020?
All respondents

I. My institution would not take action to
limit the size of our balance sheet
II. An increase of 5-10%
III. An increase of 11-25%
IV. An increase of 26-50%
V. An increase over 50%
VI. My institution is already taking action to
limit the size of our balance sheet and
expects to continue to limit the size of
our balance sheet at any level of growth
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

26
7
14
6
0

32.5
8.8
17.5
7.5
0.0

16
6
12
3
0

32.7
12.2
24.5
6.1
0.0

10
1
2
3
0

32.3
3.2
6.5
9.7
0.0

27
80

33.8
100.0

12
49

24.5
100.0

15
31

48.4
100.0

If you answered I to question 3.A, please skip to question 4.
B. Please rate the factors that would prompt your institution to seek to reduce the size
of your balance sheet if it reached the level consistent with your response to question
3.A? Please rate the following factors on a scale of 1 (not important) to 5 (very
important). If the factor is not applicable to your institution, please select “N/A”. If
an important factor for your institution is not listed, or you would like to provide
clarification on any factor, please provide it in the comment box.

13

i. Net interest margin pressure
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

9
6
13
11
15
54

16.7
11.1
24.1
20.4
27.8
100.0

4
5
7
5
12
33

12.1
15.2
21.2
15.2
36.4
100.0

5
1
6
6
3
21

23.8
4.8
28.6
28.6
14.3
100.0

Note: 0 respondents provided an answer of N/A and 0 left it blank.

ii. Return on assets
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

7
8
13
15
10
53

13.2
15.1
24.5
28.3
18.9
100.0

4
5
5
11
7
32

12.5
15.6
15.6
34.4
21.9
100.0

3
3
8
4
3
21

14.3
14.3
38.1
19.0
14.3
100.0

Note: 1 respondent provided an answer of N/A and 0 left it blank.

iii. U.S. tier 1 leverage ratio
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

6
5
9
3
14
37

16.2
13.5
24.3
8.1
37.8
100.0

4
5
8
3
12
32

12.5
15.6
25.0
9.4
37.5
100.0

2
0
1
0
2
5

40.0
0.0
20.0
0.0
40.0
100.0

Note: 17 respondents provided an answer of N/A and 0 left it blank.

iv. U.S. supplementary leverage ratio (SLR) for bank holding companies
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

6
3
7
0
3
19

31.6
15.8
36.8
0.0
15.8
100.0

5
3
5
0
3
16

31.3
18.8
31.3
0.0
18.8
100.0

1
0
2
0
0
3

33.3
0.0
66.7
0.0
0.0
100.0

Note: 35 respondents provided an answer of N/A and 0 left it blank.

14

March 2021 Senior Financial Officer Survey

v. U.S. enhanced SLR (applicable only to U.S. GSIBs)
All respondents

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

2
0
3
0
3
8

25.0
0.0
37.5
0.0
37.5
100.0

2
0
3
0
3
8

25.0
0.0
37.5
0.0
37.5
100.0

Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable

Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable

1 (Not important)
2
3
4
5 (Very important)
Total

Note: 46 respondents provided an answer of N/A and 0 left it blank.

vi. U.S. GSIB capital surcharge
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

0
0
2
4
2
8

0.0
0.0
25.0
50.0
25.0
100.0

0
0
2
4
2
8

0.0
0.0
25.0
50.0
25.0
100.0

Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable

Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable

Note: 46 respondents provided an answer of N/A and 0 left it blank.

vii. U.S. SLR for depository institutions
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

5
4
5
2
2
18

27.8
22.2
27.8
11.1
11.1
100.0

5
4
5
2
2
18

27.8
22.2
27.8
11.1
11.1
100.0

Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable

Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable

Note: 36 respondents provided an answer of N/A and 0 left it blank.

15

viii. Other U.S. regulations
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

8
12
6
2
9
37

21.6
32.4
16.2
5.4
24.3
100.0

7
7
4
2
3
23

30.4
30.4
17.4
8.7
13.0
100.0

1
5
2
0
6
14

7.1
35.7
14.3
0.0
42.9
100.0

Note: 17 respondents provided an answer of N/A and 0 left it blank.

ix. Foreign regulations
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

11
6
6
3
8
34

32.4
17.6
17.6
8.8
23.5
100.0

9
3
1
2
0
15

60.0
20.0
6.7
13.3
0.0
100.0

2
3
5
1
8
19

10.5
15.8
26.3
5.3
42.1
100.0

Note: 20 respondents provided an answer of N/A and 0 left it blank.

x. Other (Please specify in comment box)
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

0
0
0
3
8
11

0.0
0.0
0.0
27.3
72.7
100.0

0
0
0
0
5
5

0.0
0.0
0.0
0.0
100.0
100.0

0
0
0
3
3
6

0.0
0.0
0.0
50.0
50.0
100.0

Note: 17 respondents provided an answer of N/A and 26 left it blank.

In written responses, some respondents noted internal metrics for size or growth, the
Federal Reserve’s tailoring rules that adjust regulatory requirements based on a
bank’s size and risk profile, and other factors that could prompt their bank to seek
to reduce the size of its balance sheet.
C. Please rate the likelihood that your institution would pursue the liability adjustments
listed in the table below in order to reduce the level or growth of your balance sheet if
it reached the size consistent with your response to question 3.A. Please rate the following actions on a scale of 1 (very unlikely) to 5 (very likely). If the action is not
applicable to your bank, please select “N/A”. If an action has already been taken and
cannot be expanded beyond its current stance, please select "No Room for Further
Adjustment". If an important liability adjustment for your institution is not listed, or

16

March 2021 Senior Financial Officer Survey

you would like to provide clarification on any action, please provide it in the comment box.
i. Reduce deposit rates for operational deposits
All respondents

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

7
10
7
10
5
39

17.9
25.6
17.9
25.6
12.8
100.0

4
7
5
6
5
27

14.8
25.9
18.5
22.2
18.5
100.0

3
3
2
4
0
12

25.0
25.0
16.7
33.3
0.0
100.0

Note: 4 respondents reported no room for further adjustment, 11 respondents provided an answer of N/A, and 0 left it blank.

ii. Reduce deposit rates for non-operational deposits
All respondents

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

1
2
5
9
29
46

2.2
4.3
10.9
19.6
63.0
100.0

1
0
4
4
20
29

3.4
0.0
13.8
13.8
69.0
100.0

0
2
1
5
9
17

0.0
11.8
5.9
29.4
52.9
100.0

Note: 5 respondents reported no room for further adjustment, 3 respondents provided an answer of N/A, and 0 left it blank.

iii. Impose fees on operational deposits
All respondents

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

21
13
5
1
0
40

52.5
32.5
12.5
2.5
0.0
100.0

14
10
3
1
0
28

50.0
35.7
10.7
3.6
0.0
100.0

7
3
2
0
0
12

58.3
25.0
16.7
0.0
0.0
100.0

Note: 1 respondent reported no room for further adjustment, 13 respondents provided an answer of N/A, and 0 left it blank.

17

iv. Impose fees on non-operational deposits
All respondents

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

20
9
12
3
3
47

42.6
19.1
25.5
6.4
6.4
100.0

12
5
9
2
3
31

38.7
16.1
29.0
6.5
9.7
100.0

8
4
3
1
0
16

50.0
25.0
18.8
6.3
0.0
100.0

Note: 1 respondent reported no room for further adjustment, 6 respondents provided an answer of N/A, and 0 left it blank.

v. Impose caps on non-operational deposit inflows
All respondents

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

10
4
12
6
16
48

20.8
8.3
25.0
12.5
33.3
100.0

8
3
7
6
6
30

26.7
10.0
23.3
20.0
20.0
100.0

2
1
5
0
10
18

11.1
5.6
27.8
0.0
55.6
100.0

Note: 0 respondents reported no room for further adjustment, 5 respondents provided an answer of N/A, and 1 left it blank.

vi. Decrease advances from FHLBs (“N/A” for banks that are not FHLB members)
All respondents

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

2
1
2
4
5
15

14.3
7.1
14.3
28.6
35.7
100.0

2
1
2
4
5
14

14.3
7.1
14.3
28.6
35.7
100.0

0
0
0
0
0
0

0.0
0.0
0.0
0.0
0.0
0.0

Note: 15 respondents reported no room for further adjustment, 25 respondents provided an answer of N/A, and 0 left it blank.

vii. Allow outstanding wholesale funding liabilities (for example, negotiable certificates of deposit or commercial paper) to mature without replacing
All respondents

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

2
3
3
8
30
46

4.3
6.5
6.5
17.4
65.2
100.0

2
1
1
4
17
25

8.0
4.0
4.0
16.0
68.0
100.0

0
2
2
4
13
21

0.0
9.5
9.5
19.0
61.9
100.0

Note: 7 respondents reported no room for further adjustment, 1 respondent provided an answer of N/A, and 0 left it blank.

18

March 2021 Senior Financial Officer Survey

viii. Other (please explain in comment box)
All respondents

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

1
1
1
0
1
4

25.0
25.0
25.0
0.0
25.0
100.0

1
1
1
0
1
4

25.0
25.0
25.0
0.0
25.0
100.0

0
0
0
0
0
0

0.0
0.0
0.0
0.0
0.0
0.0

1 (Very unlikely)
2
3
4
5 (Very likely)
Total

Note: 14 respondents provided an answer of N/A, and 36 left it blank.

Written responses generally reinforced or elaborated on views that had already
been expressed.

Part II: Overnight Wholesale Funding Market Activity
The questions in Part 2 of the survey ask you to explain the considerations that motivate your
bank’s activity in overnight wholesale funding markets such as fed funds, Eurodollars, and
repurchase agreements. If your bank is affiliated with a broker-dealer, do not include the normal financing activity of your broker-dealer for the purposes of these questions.
4. For each change in the level of short-term interest rates shown in the first column of the
following table, please provide the approximate additional volume of overnight unsecured
borrowing your institution would conduct. For the purposes of this question, please
assume that IOER remains constant and that the starting point is the average spread of
the overnight bank funding rate (OBFR) relative to IOER during February 2021 (i.e.
IOER minus 3 basis points). Please also assume that the interest rate scenario is one that
persists for a significant period of time. Please enter “$0” if changes in the level of shortterm interest rates relative to IOER would not affect your activity in overnight unsecured
markets compared to February 2021. Please enter “N/A” if you do not engage in this
activity.
Change in the amount of your institution’s average daily overnight unsecured borrowing
activity if:
• Relative to the level of IOER, the OBFR is at the same level as averaged during February 2021
All respondents

Increased
Not active
Unchanged
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

1
26
53
80

1.3
32.5
66.3
100.0

1
23
25
49

2.0
46.9
51.0
100.0

0
3
28
31

0.0
9.7
90.3
100.0

19

• Relative to the level of IOER, the OBFR is 2-5 basis points lower than it averaged during February 2021
All respondents

Increased
Not active
Unchanged
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

12
25
43
80

15.0
31.3
53.8
100.0

3
23
23
49

6.1
46.9
46.9
100.0

9
2
20
31

29.0
6.5
64.5
100.0

• Relative to the level of IOER, the OBFR is 6-10 basis points lower than it averaged
during February 2021
All respondents

Increased
Not active
Unchanged
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

19
25
36
80

23.8
31.3
45.0
100.0

4
23
22
49

8.2
46.9
44.9
100.0

15
2
14
31

48.4
6.5
45.2
100.0

• Relative to the level of IOER, the OBFR is more than 10 basis points lower than it
averaged during February 2021
All respondents

Increased
Not active
Unchanged
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

21
25
34
80

26.3
31.3
42.5
100.0

5
23
21
49

10.2
46.9
42.9
100.0

16
2
13
31

51.6
6.5
41.9
100.0

5. What is the smallest spread above IOER at which your institution would be willing to
invest reserve balances into the following high-quality liquid assets?
i. Overnight Treasury reverse repos (in bps)
All respondents

0-10 bps
11-25 bps
26-50 bps
51 bps or more
Total
Note: 6 respondents left it blank.

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

66
6
1
1
74

89.2
8.1
1.4
1.4
100.0

41
5
1
0
47

87.2
10.6
2.1
0.0
100.0

25
1
0
1
27

92.6
3.7
0.0
3.7
100.0

20

March 2021 Senior Financial Officer Survey

ii. Short-dated Treasury securities (remaining maturity of 1 year or less) (in bps)
All respondents

0-10 bps
11-25 bps
26-50 bps
51 bps or more
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

47
16
5
1
69

68.1
23.2
7.2
1.4
100.0

25
15
5
1
46

54.3
32.6
10.9
2.2
100.0

22
1
0
0
23

95.7
4.3
0.0
0.0
100.0

Note: 11 respondents left it blank.

iii. Intermediate Treasury securities (remaining maturity between 1 year and
5 years) (bps)
All respondents

0-10 bps
11-25 bps
26-50 bps
51 bps or more
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

15
14
12
19
60

25.0
23.3
20.0
31.7
100.0

5
7
12
18
42

11.9
16.7
28.6
42.9
100.0

10
7
0
1
18

55.6
38.9
0.0
5.6
100.0

Note: 20 respondents left it blank.

iv. Longer-dated Treasury securities (remaining maturity greater than 5 years) (bps)
All respondents

0-10 bps
11-25 bps
26-50 bps
51 bps or more
Total
Note: 24 respondents left it blank.

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

4
12
4
36
56

7.1
21.4
7.1
64.3
100.0

2
4
3
33
42

4.8
9.5
7.1
78.6
100.0

2
8
1
3
14

14.3
57.1
7.1
21.4
100.0

21

Part III: Federal Reserve Facilities
Discount Window
6. Which of the following statements best characterizes your bank’s willingness to borrow
discount window primary credit under its existing terms?
All respondents
Banks
I. Would be willing to borrow primary credit if
other funding sources are more expensive.
II. Would be willing to borrow primary credit to
lend at higher rates in money markets.
III. Would be willing to borrow primary credit
only if other funding sources became less
available due to a firm-specific strain.
IV. Would be willing to borrow primary credit
only if other funding sources became less
available due to market-wide conditions.
V. Other (if you do not have discount window
borrowing arrangements in place, please
indicate here)
Total

Domestic

Percent

Foreign

Banks

Percent

Banks

Percent

7

8.8

7

14.3

0

0.0

0

0.0

0

0.0

0

0.0

14

17.5

10

20.4

4

12.9

50

62.5

26

53.1

24

77.4

9
80

11.3
100.0

6
49

12.2
100.0

3
31

9.7
100.0

Written responses generally reinforced the views that had already been expressed, and
often emphasized the respondent’s reluctance to borrow from the discount window.

Paycheck Protection Program Liquidity Facility
This section seeks to gather information about the Federal Reserve’s Paycheck Protection
Program Liquidity Facility (PPPLF), which provides term funding to institutions that are eligible to originate loans under the Small Business Administration’s Paycheck Protection Program (PPP). While the PPPLF has been established to bolster the effectiveness of the PPP by
supplying liquidity to participating financial institutions through term financing backed by
PPP loans, the PPPLF and PPP are distinct programs.
The Federal Reserve is not involved in the administration of the PPP and questions 7 through
9 of this survey are not intended to solicit views about the PPP.
7. Has your bank originated loans or purchased loans authorized under the Small Business
Administration’s Paycheck Protection Program (PPP) in either 2020 or 2021? [Yes/No]

Yes
No
Total

All Respondents

Domestic

Foreign

44
36
80

41
8
49

3
28
31

If “yes,” please proceed to question 8. If “no,” please skip the remaining questions.

22

March 2021 Senior Financial Officer Survey

8. If your bank has originated PPP loans, which of the following statements best describes
your bank’s view of the PPPLF? (choose one)
All respondents

I. Have not borrowed from the PPPLF, and the
availability of funding from the PPPLF has
not changed our ability/willingness to make
PPP loans.
II. Have not borrowed from the PPPLF, but the
availability of funding from the PPPLF has
increased our willingness/ability to make
PPP loans.
III. Have borrowed from the PPPLF, but the
availability of funding from the PPPLF has
not changed our ability/willingness to make
PPP loans.
IV. Have borrowed from the PPPLF, and the
availability of funding from the PPPLF has
increased our willingness/ability to make
PPP loans.
V. Have borrowed from the PPPLF, and the
availability of funding from the PPPLF is
essential to our willingness/ability to make
PPP loans.
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

27

61.4

26

63.4

1

33.3

4

9.1

4

9.8

0

0.0

9

20.5

7

17.1

2

66.7

3

6.8

3

7.3

0

0.0

1
44

2.3
100.0

1
41

2.4
100.0

0
3

0.0
100.0

Question 9 seeks information on potential reasons why PPP lenders that took out PPPLF
advances in 2020 may not have participated in the PPPLF in 2021. If you have participated in
the PPPLF but have not taken out PPPLF advances collateralized by PPP loans made in 2021,
please answer question 9.
If you have taken out PPPLF advances collateralized by PPP loans made in 2021, or have not
participated in the PPPLF altogether, please skip this question.
9. If you took out PPPLF advances collateralized by PPP loans made in 2020 but have not
taken out advances collateralized by PPP loans made in 2021 please rate the following factors affecting your decisions regarding the PPPLF in 2021 on a scale of 1 (not important)
to 5 (very important). If the factor is not applicable to your bank, please select “N/A.”
If an important factor for your institution is not listed, please provide it in the comment box.

23

i. Institution no longer makes PPP loans
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

3
0
0
0
0
3

100.0
0.0
0.0
0.0
0.0
100.0

1
0
0
0
0
1

100.0
0.0
0.0
0.0
0.0
100.0

2
0
0
0
0
2

100.0
0.0
0.0
0.0
0.0
100.0

Note: 7 respondents provided an answer of N/A

ii. Institution’s funding needs are lower now than in 2020
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

0
0
0
1
7
8

0.0
0.0
0.0
12.5
87.5
100.0

0
0
0
1
5
6

0.0
0.0
0.0
16.7
83.3
100.0

0
0
0
0
2
2

0.0
0.0
0.0
0.0
100.0
100.0

Note: 2 respondents provided an answer of N/A

iii. PPPLF terms are less advantageous relative to other funding options now than in
2020 (e.g., alternative funding sources are lower cost relative to the PPPLF in 2021
when compared to 2020)
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total
Note: 2 respondents provided an answer of N/A

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

1
4
1
2
0
8

12.5
50.0
12.5
25.0
0.0
100.0

0
4
1
1
0
6

0.0
66.7
16.7
16.7
0.0
100.0

1
0
0
1
0
2

50.0
0.0
0.0
50.0
0.0
100.0

24

March 2021 Senior Financial Officer Survey

iv. Concern over the requirement to complete a new PPPLF Letter of Agreement
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

5
2
1
0
0
8

62.5
25.0
12.5
0.0
0.0
100.0

4
1
1
0
0
6

66.7
16.7
16.7
0.0
0.0
100.0

1
1
0
0
0
2

50.0
50.0
0.0
0.0
0.0
100.0

Note: 2 respondents provided an answer of N/A

v. Concern over the administrative burden with previous PPPLF advances
All respondents

1 (Not important)
2
3
4
5 (Very important)
Total

Domestic

Foreign

Banks

Percent

Banks

Percent

Banks

Percent

2
2
2
2
0
8

25.0
25.0
25.0
25.0
0.0
100.0

1
2
1
2
0
6

16.7
33.3
16.7
33.3
0.0
100.0

1
0
1
0
0
2

50.0
0.0
50.0
0.0
0.0
100.0

Note: 2 respondents provided an answer of N/A

Written responses to this question generally reinforced the views that had already
been expressed.