FR2018_20240520_omb_B

Supporting Statement Part B for the
Senior Loan Officer Opinion Survey on Bank Lending Practices
(FR 2018; OMB No. 7100-0058)
Summary
For all information collections that involve surveys or require a statistical methodology,
the Board of Governors of the Federal Reserve System (Board) is required to provide a complete
justification and explanation of the use of such a methodology. For collections that employ
surveys without such a methodology, the Board should be prepared to justify its decision not to
use statistical methods in any case where such methods might reduce burden or improve
accuracy of results.
Background
The Federal Reserve originally initiated a survey on bank lending practices in 1964 with
a respondent panel of 120 banks, 22 questions, and a reporting frequency of every 3 months.
Since then, the respondent panel, questions, and frequency have changed, depending on the
conditions at the time.1 The last important change occurred in May 2012, when the Federal
Reserve reduced the minimum asset size for panel institutions and added an additional 20
domestically charted commercial banks to the panel. The expanded panel provided deeper
coverage of commercial real estate loans and small business lending, as well as a more
comprehensive picture of differences in lending conditions at the largest banks and regional
banks.
The information obtained from the survey provides valuable insights on credit market and
banking developments and is helpful in the formulation of monetary policy. Information from the
survey is reported regularly to the Board and to the Federal Open Market Committee (FOMC) as
an official memorandum to FOMC participants and in other internal briefing materials. This
information has been particularly valuable in the recent period as it has provided the Federal
Reserve with insight into the potential effects of deposit outflows and funding pressures in the
banking sector on the availability of credit to households and businesses. The survey has also
attracted considerable attention from the business and financial press and is used in academic
research on banking and macroeconomic activity.2 Aggregate survey responses have been used
to study the effects of the more stringent international capital requirements commonly referred to

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The survey was conducted five times in 1985, 1986, and 1987, four times in 1988 and 1989, five times in 1990,
and six times in 1991. Since that time, it has been conducted four times every year, except for 1998, 2001, and 2020,
in which the survey was conducted five times.
2
Examples of academic research include William F. Bassett III, Mary Beth Chosak, John C. Driscoll, and Egon
Zakrajsek (2014). “Changes in Bank Lending Standards and the Macroeconomy,” Journal of Monetary Economics,
62(1), pp. 23-40, Juliane Begenau (2020), Capital requirements, risk choice, and liquidity provision in a businesscycle model, 136(2), pp 355-378, Jose M. Berrospide and Rochelle M. Edge (2011). “The Effects of Bank Capital
on Lending: What Do We Know, and What Does it Mean?” International Journal of Central Banking, 6(4), pp. 554, and Kaiji Chen, Patrick Higgins, Tao Zha (2021) Cyclical lending standards: A structural analysis, Review of
Economics Dynamics, 42(October), pp 283-306.

as Basel III.3 The results are also included in the Board’s reports to Congress on Availability of
Credit to Small Businesses, which are produced every five years pursuant to section 2227 of the
Economic Growth and Regulatory Paperwork Reduction Act of 1996. The survey results have
also been useful in enabling the Federal Reserve to keep abreast of complex banking
developments that have evolved over time, and analysis based on the survey results often appears
in Federal Reserve publications as the Monetary Policy Report, which is submitted to Congress
semiannually, and the recently inaugurated Financial Stability Report.
In the last several years, the survey has provided critical information on a number of
important banking topics. Recent special questions have addressed issues in rapidly changing
credit markets, banks’ lending terms and outlook for commercial real estate lending standards
and demand, banks’ assessments of the levels of their lending standards relative to longer-term
norms, and banks’ expectations about changes in asset quality and credit standards over the
coming year. Regarding lending to households, the survey has provided valuable information on
timely topics including the asset quality of consumer loans in areas most affected by falling
energy prices and the likelihood of approving credit card applications by borrowers’ credit score.
In addition, the survey helped shed light on broader issues, such as the relationship between
banks’ lending policies and movements in the yield curve for Treasury securities, and the factors
that influenced banks’ and borrowers’ participation in the Main Street Lending Program.
Universe and Respondent Selection
The FR 2018 panel comprises domestically chartered commercial banks and U.S.
branches and agencies of foreign banks. As of March 31, 2023, the universe of domestically
chartered commercial banks comprised over 4,100 banks, and the universe of foreign branches
and agencies included over 180 entities. In addition, 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.
During the last collection, conducted in late March through early April 2023, 65 out of 71
domestic banks and 19 out of 21 branches and agencies of foreign banks responded to the
survey.
Domestically Chartered Commercial Banks
Since 2012, the Federal Reserve has tried to maintain a panel of 80 such banks, the
authorized size (from 1981 to 2012, the Federal Reserve tried to maintain a panel of 60 insured,
domestically chartered commercial banks). To ensure adequate geographic coverage, the survey
panel of domestic banks spans all Federal Reserve Districts, while balancing the need to keep it
heavily weighted toward the largest banks. When the largest banks in a District are not among its
respondents, it is generally because the banks are specialized (for example, credit card banks) or
Examples of Basel III research include BIS (2010). “Assessing the Macroeconomic Impact of the Transition to
Stronger Capital and Liquidity Requirements,” Macroeconomic Assessment Group. Basel, Switzerland: Bank for
International Settlements, and Angela Maddaloni and Jose-Luis Peydro (2011). “Bank Risk-Taking, Securitization,
Supervision, and Low Interest Rates: Evidence from U.S. and Euro Area Lending Standards,” Review of Financial
Studies, 24(6), pp. 2121-2165 (https://academic.oup.com/rfs/article/24/6/2121/1587432).
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because they are part of a holding company that is already represented in another District. The
presence of the largest banks in the survey is critical, as they play an important role in
developing and practicing new banking techniques. However, the panel also includes a fair
number of large and medium-size regional banks, which allows for a greater diversity of
responses and provides a broader view of the banking system.
As of March 31, 2023, the panel of domestic respondents contained 73 banks, 37 of
which had assets of $50 billion or more. The assets of the panel banks totaled $15.1 trillion and
accounted for about 74 percent of the $20.5 trillion in total assets of all domestically chartered
institutions.
Selection Criteria for the Domestic Bank Panel
In selecting the panel, the Federal Reserve generally imposes three constraints. The first
is size: Banks that have less than $2 billion of total assets or for which commercial and industrial
(C&I) loans are less than 5 percent of total assets are eliminated from consideration, with a few
exceptions.4 The second is geographic diversity: Between three and nine banks are included from
each District.5 The third is mutual independence: With some exceptions, a bank is eliminated
from consideration if it is a subsidiary of a bank holding company that is already represented in
the panel, because its responses would likely not be independent of those of the related bank
already providing responses.6
U.S. Branches and Agencies of Foreign Banks
The Federal Reserve tries to maintain a panel size of 24, the authorized size. As of March
2023, the panel included 21 institutions, 20 of which are located in the New York District. In
March 2023, the share of C&I loans held by respondent U.S. branches and agencies of foreign
banks ($366 billion) relative to that held by the universe of such institutions ($519 billion) was
71 percent, up from 66 percent in June 2017. To keep the panel representative with respect to the
parent banks’ countries of origin going forward, branches and agencies would continue to be
added to the panel based on the location of the parent bank as well as size.
Optional Panel
The panels of large domestically chartered commercial banks and U.S. branches and
agencies of foreign 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
4

As of March 31, 2023, seven banks had C&I loans that were less than 5 percent of total assets.
Two panel members have main offices in Federal Reserve Districts that are different from those that collect their
survey responses because in these cases the respondent bank (not the head office) is considered the primary lending
bank.
6
In cases where two banks under a common parent company are included in the panel, the Federal Reserve has
made efforts to determine that the banks’ responses to survey questions are independent.
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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 2023. Also consistent with the FR 2023, the surveys of optional panels would be
conducted either by Federal Reserve Bank staff or Board staff, as appropriate.
Procedures for Collecting Information
This voluntary survey is conducted with a senior loan officer at each respondent bank,
generally through an electronic submission via the Survey Central platform, up to six times a
year. Senior staff at the Reserve Banks with knowledge of bank lending practices email the
survey questions to a senior loan officer at each respondent bank. Federal Reserve Banks
conduct follow-up telephone interviews with institutions that did not respond or if the responses
require further information. The Reserve Banks electronically transmit survey responses to the
Federal Reserve Board, where the data are tabulated and summarized in a public release, which
is made available on the Federal Reserve’s website. The survey results also are discussed in
annual Federal Reserve Bulletin articles.
Methods to Maximize Response
A respondent may decline to answer a particular question when answering would entail
excessive burden. Experience has shown that only a small number of respondents decline to
answer any particular question. Response rates overall have been high and resulted in adequate
and informative answers.
Testing of Procedures
There are no testing of procedures for this collection.

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