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# 	Senior Loan Officer Opinion Survey on Bank Lending PracticesApril 2016

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**Table 2	    Senior Loan Officer Opinion Survey on Bank Lending Practices	  at Selected Branches and Agencies of Foreign Banks	    in the United States	  1(Status of policy as of April 2016)**

1. 	    	Over the past three months, how have your bank's credit	standards for approving applications for C&I loans or credit	lines—other than those to be used to finance mergers and	acquisitions—changed?       

** All RespondentsBanksPercentTightened considerably   0         0.0 Tightened somewhat   6        27.3 Remained basically unchanged   16       72.7 Eased somewhat   0         0.0 Eased considerably   0         0.0 **Total**   22      100.0 **

2. 	    	For applications for C&I loans or credit lines—other than	those to be used to finance mergers and acquisitions—that your	bank currently is willing to approve, how have the terms of	those loans changed over the past three months?       

a. 	Maximum size of credit lines

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    4         18.2 Remained basically unchanged   17         77.3 Eased somewhat    1          4.5 Eased considerably    0          0.0 **Total**   22        100.0 **

b. 	Maximum maturity of loans or credit lines

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    2          9.1 Remained basically unchanged   20         90.9 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   22        100.0 **

c. 	Costs of credit lines

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    3         13.6 Remained basically unchanged   19         86.4 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   22        100.0 **

d. 	Spreads of loan rates over your	bank's cost of funds (wider spreads=tightened, narrower	spreads=eased)

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    4         18.2 Remained basically unchanged   18         81.8 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   22        100.0 **

e. 	Premiums charged on riskier loans

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    6         27.3 Remained basically unchanged   16         72.7 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   22        100.0 **

f. 	Loan covenants

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    2          9.1 Remained basically unchanged   20         90.9 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   22        100.0 **

g. 	Collateralization requirements

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    0          0.0 Remained basically unchanged   22        100.0 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   22        100.0 **

h. 	Use of interest rate floors (more use=tightened, less use=eased)

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    0          0.0 Remained basically unchanged   20        100.0 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   20        100.0 **

3. 	    	If your bank has tightened or eased its credit standards or	its terms for C&I loans or credit lines over the past	three months (as described in questions 1 and 2), how	important have been the following possible reasons for the	change?       

A. 	  	Possible reasons for tightening credit standards or	loan terms:	

a. 	Deterioration in your bank's	current or expected capital position

** All RespondentsBanksPercentNot important    8          100.0 Somewhat important    0            0.0 Very important    0            0.0 **Total**    8          100.0 **

b. 	Less favorable or more uncertain	economic outlook

** All RespondentsBanksPercentNot important    3           37.5 Somewhat important    5           62.5 Very important    0            0.0 **Total**    8          100.0 **

c. 	Worsening of industry-specific	problems  (please specify industries)  

** All RespondentsBanksPercentNot important    2           25.0 Somewhat important    0            0.0 Very important    6           75.0 **Total**    8          100.0 **

d. 	Less aggressive competition from	other banks or nonbank lenders (other financial intermediaries	or the capital markets)

** All RespondentsBanksPercentNot important    8          100.0 Somewhat important    0            0.0 Very important    0            0.0 **Total**    8          100.0 **

e. 	Reduced tolerance for risk

** All RespondentsBanksPercentNot important    2           25.0 Somewhat important    6           75.0 Very important    0            0.0 **Total**    8          100.0 **

f. 	Decreased liquidity in the	secondary market for these loans

** All RespondentsBanksPercentNot important    4           50.0 Somewhat important    4           50.0 Very important    0            0.0 **Total**    8          100.0 **

g. 	Deterioration in your	bank's current or expected liquidity position

** All RespondentsBanksPercentNot important    8          100.0 Somewhat important    0            0.0 Very important    0            0.0 **Total**    8          100.0 **

h. 	Increased concerns about the potential 	effects of legislative changes, supervisory actions, or accounting 	standards

** All RespondentsBanksPercentNot important    6           75.0 Somewhat important    2           25.0 Very important    0            0.0 **Total**    8          100.0 **
B. 	  Possible reasons for easing credit standards or	loan terms:

a. 	Improvement in your bank's	current or expected capital position

**Responses are not reported when the number of respondents is 3 or fewer. **

b. 	More favorable or less uncertain	economic outlook

**Responses are not reported when the number of respondents is 3 or fewer. **

c. 	Improvement in industry-specific	problems  (please specify industries) 

**Responses are not reported when the number of respondents is 3 or fewer. **

d. 	More aggressive competition from	other banks or nonbank lenders (other financial intermediaries	or the capital markets)

**Responses are not reported when the number of respondents is 3 or fewer. **

e. 	Increased tolerance for risk

**Responses are not reported when the number of respondents is 3 or fewer. **

f. 	Increased liquidity in the	secondary market for these loans

**Responses are not reported when the number of respondents is 3 or fewer. **

g. 	Improvement in your bank's	current or expected liquidity position

**Responses are not reported when the number of respondents is 3 or fewer. **

h. 	Reduced concerns about the potential 	effects of legislative changes, supervisory actions, or accounting 	standards

**Responses are not reported when the number of respondents is 3 or fewer. **

4. 	    	Apart from normal seasonal variation, how has demand for C&I	loans changed over the past three months? (Please consider	only funds actually disbursed as opposed to requests for new	or increased lines of credit.)      

** All RespondentsBanksPercentSubstantially stronger   0         0.0 Moderately stronger   2         9.1 About the same   14       63.6 Moderately weaker   6        27.3 Substantially weaker   0         0.0 **Total**   22      100.0 **

5. 	    	If demand for C&I loans has strengthened or weakened over	the past three months (as described in question 4), how important have been the	following possible reasons for the change?        

A. 	  If stronger loan demand (answer 1 or 2 to question	4), possible reasons:

**
a. 	Customer inventory financing	needs increased

Responses are not reported when the number of respondents is 3 or fewer.
b. 	Customer accounts receivable	financing needs increased

Responses are not reported when the number of respondents is 3 or fewer.
c. 	Customer investment in plant or	equipment increased

Responses are not reported when the number of respondents is 3 or fewer.
d. 	Customer internally generated	funds decreased

Responses are not reported when the number of respondents is 3 or fewer.
e. 	Customer merger or acquisition	financing needs increased

Responses are not reported when the number of respondents is 3 or fewer.
f. 	Customer borrowing shifted to	your bank from other bank or nonbank sources because these	other sources became less attractive

Responses are not reported when the number of respondents is 3 or fewer.
g. 	Customer precautionary demand for cash and 	liquidity increased  

Responses are not reported when the number of respondents is 3 or fewer.B. 	  If weaker loan demand (answer 4 or 5 to question	4), possible reasons:

a. 	Customer inventory financing	needs decreased

 All RespondentsBanksPercentNot important    6          100.0 Somewhat important    0            0.0 Very important    0            0.0 **Total**    6          100.0 
b. 	Customer accounts receivable	financing needs decreased

 All RespondentsBanksPercentNot important    6          100.0 Somewhat important    0            0.0 Very important    0            0.0 **Total**    6          100.0 
c. 	Customer investment in plant or	equipment decreased

 All RespondentsBanksPercentNot important    3           50.0 Somewhat important    2           33.3 Very important    1           16.7 **Total**    6          100.0 
d. 	Customer internally generated	funds increased

 All RespondentsBanksPercentNot important    6          100.0 Somewhat important    0            0.0 Very important    0            0.0 **Total**    6          100.0 
e. 	Customer merger or acquisition	financing needs decreased

 All RespondentsBanksPercentNot important    1           16.7 Somewhat important    4           66.7 Very important    1           16.7 **Total**    6          100.0 
f. 	Customer borrowing shifted	from your bank to other bank or nonbank sources because	these other sources became more attractive

 All RespondentsBanksPercentNot important    5           83.3 Somewhat important    1           16.7 Very important    0            0.0 **Total**    6          100.0 
g. 	Customer precautionary demand for cash 	 and liquidity decreased 

 All RespondentsBanksPercentNot important    6          100.0 Somewhat important    0            0.0 Very important    0            0.0 **Total**    6          100.0 

6. 	    	At your bank, apart from normal seasonal variation, how has the number of inquiries from potential	business borrowers regarding the availability and terms of new	credit lines or increases in existing lines changed over the	past three months? (Please consider only inquiries for	additional or increased C&I lines as opposed to the refinancing of	existing loans.)      

 All RespondentsBanksPercentThe number of inquiries has increased substantially   0         0.0 The number of inquiries has increased moderately   1         4.8 The number of inquiries has stayed about the same   18       85.7 The number of inquiries has decreased moderately   2         9.5 The number of inquiries has decreased substantially   0         0.0 **Total**   21      100.0 *Over the past year, declines in oil prices may have led 	   to strains in firms involved in oil and natural gas drilling/extraction 	   and in the companies that provide support to those firms.	   **Question 7** asks 	   you to indicate what fraction of C&I loans held on 	   your bank's books were made to firms in the oil and natural gas 	   drilling/extraction sector. **Question 8** asks about your outlook for delinquencies 	   and charge-offs on such loans. **Question 9** asks about changes in lending policies made 	   by your bank in response to developments in the oil and 	   natural gas drilling/extraction sector. **Question** asks about possible spillover effects from declines in energy commodity prices and associated declines in energy sector activities to other loan types.*

7. 	    	   Approximately what fraction of C&I loans currently 	   outstanding on your bank's books were made to firms in 	   the oil and natural gas drilling/extraction sector?        

 All RespondentsBanksPercentMore than 20 percent   1         5.0 More than 10 percent but less than 20 percent   7        35.0 More than 5 percent but less than 10 percent   8        40.0 More than 1 percent but less than 5 percent   4        20.0 Less than 1 percent   0         0.0 **Total**   20      100.0 
For this question,   1    respondent answered “My bank does not have any outstanding loans or lines of credit to firms in the oil and natural gas drilling/extraction sector.”

8. 	    	   Assuming that economic activity progresses in line with consensus 	   forecasts, and energy commodity prices evolve in line with current 	   futures prices, what is your outlook for delinquencies and charge-offs 	   on your bank's existing loans to firms in the oil and natural gas 	   drilling/extraction sector over the remainder of 2016?        

 All RespondentsBanksPercentLoan quality is likely to improve substantially   0         0.0 Loan quality is likely to improve somewhat   0         0.0 Loan quality is likely to remain around current levels   6        30.0 Loan quality is likely to deteriorate somewhat   13       65.0 Loan quality is likely to deteriorate substantially   1         5.0 **Total**   20      100.0 
For this question,   1    respondent answered “My bank does not have any outstanding loans to firms in the oil and natural gas drilling/extraction sector.”

9. 	    	   Please indicate how important each of the following actions have been in your 	   bank's efforts to mitigate risks of loan losses from loans made to firms in the 	   oil and natural gas drilling/extraction sector over the past year.  	           

a. 	Tightening lending policies on new loans 	                             or lines of credit made to firms in this sector

 All RespondentsBanksPercentNot important    2         10.0 Somewhat important    6         30.0 Very important   12         60.0 **Total**   20        100.0 
b. 	Enforcing material adverse change clauses or other 	                             covenants to limit draws on existing credit lines to 	                             firms in this sector

 All RespondentsBanksPercentNot important    8         42.1 Somewhat important    8         42.1 Very important    3         15.8 **Total**   19        100.0 
c. 	Restructuring outstanding loans to make them more robust to 	                             the changed outlook for energy prices

 All RespondentsBanksPercentNot important    4         21.1 Somewhat important    5         26.3 Very important   10         52.6 **Total**   19        100.0 
d. 	Requiring additional collateral to better secure loans or 	                             credit lines to firms in this sector

 All RespondentsBanksPercentNot important    3         15.0 Somewhat important    6         30.0 Very important   11         55.0 **Total**   20        100.0 
e. 	Setting aside additional reserves for a potential increase in loan	losses

 All RespondentsBanksPercentNot important    6         30.0 Somewhat important    8         40.0 Very important    6         30.0 **Total**   20        100.0 
f. 	Tightening lending policies on new loans or credit 	                             lines made to firms in other sectors

 All RespondentsBanksPercentNot important    8         40.0 Somewhat important    9         45.0 Very important    3         15.0 **Total**   20        100.0 
g. 	Hedging the risks arising from declines in energy prices through 	                               derivatives contracts

 All RespondentsBanksPercentNot important    9         47.4 Somewhat important    9         47.4 Very important    1          5.3 **Total**   19        100.0 
h. 	My bank has not needed to mitigate risks of loan losses made to firms in this sector

 All RespondentsBanksPercentNot important    7         50.0 Somewhat important    3         21.4 Very important    4         28.6 **Total**   14        100.0 ***Questions 10-11**ask about commercial real estate      (CRE) loans at your bank, including construction and land      development loans and loans secured by nonfarm nonresidential      real estate. **Question 10** deals with changes in      your bank's standards over the past three months. **Question 11** deals with changes in demand. If your bank's      lending standards or terms have not changed over the relevant      period, please report them as unchanged even if they are either      restrictive or accommodative relative to longer-term norms. If      your bank's standards or terms have tightened or eased over the      relevant period, please so report them regardless of how they      stand relative to longer-term norms. Also, please report changes      in enforcement of existing standards as changes in      standards.*

10. 	    	Over the past three months, how have your bank's credit	standards for approving applications for CRE loans changed?      

 All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    1          7.1 Remained basically unchanged   13         92.9 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**   14        100.0 

11. 	    	Apart from normal seasonal variation, how has demand for	CRE loans changed over the past three	months?      

 All RespondentsBanksPercentSubstantially stronger    0          0.0 Moderately stronger    1          7.1 About the same    8         57.1 Moderately weaker    4         28.6 Substantially weaker    1          7.1 **Total**   14        100.0 ***Questions 12-13**ask about how your bank      has changed its lending policies on CRE loans over the past year.*

12. 	            Over the past year, how has your bank changed the following policies on 	CRE loans? 	      

a. 	Maximum loan size

 All RespondentsBanksPercentTightened considerably    0            0.0 Tightened somewhat    0            0.0 Remained basically unchanged    13          92.9 Eased somewhat    1            7.1 Eased considerably    0            0.0 **Total**    14         100.0 
b. 	Maximum loan maturity

 All RespondentsBanksPercentTightened considerably    0            0.0 Tightened somewhat    0            0.0 Remained basically unchanged    14         100.0 Eased somewhat    0            0.0 Eased considerably    0            0.0 **Total**    14         100.0 
c. 	Spreads of loan rates over your bank's cost of funds                                  (wider spreads=tightened, narrower spreads=eased)

 All RespondentsBanksPercentTightened considerably    1            7.1 Tightened somewhat    2           14.3 Remained basically unchanged    8           57.1 Eased somewhat    3           21.4 Eased considerably    0            0.0 **Total**    14         100.0 
d. 	Loan-to-value ratios

 All RespondentsBanksPercentTightened considerably    0            0.0 Tightened somewhat    1            7.1 Remained basically unchanged    13          92.9 Eased somewhat    0            0.0 Eased considerably    0            0.0 **Total**    14         100.0 
e. 	Debt-service coverage ratios

 All RespondentsBanksPercentTightened considerably    0            0.0 Tightened somewhat    1            7.1 Remained basically unchanged    13          92.9 Eased somewhat    0            0.0 Eased considerably    0            0.0 **Total**    14         100.0 
f. 	Market areas served (reduced market areas=tightened,                                    expanded market areas=eased)

 All RespondentsBanksPercentTightened considerably    0            0.0 Tightened somewhat    0            0.0 Remained basically unchanged    14         100.0 Eased somewhat    0            0.0 Eased considerably    0            0.0 **Total**    14         100.0 
g. 	Length of interest-only payment period (shorter interest-only periods=tightened,longer interest-only periods=eased)

 All RespondentsBanksPercentTightened considerably    0            0.0 Tightened somewhat    1            7.1 Remained basically unchanged    13          92.9 Eased somewhat    0            0.0 Eased considerably    0            0.0 **Total**    14         100.0 

13. 	    	If your bank has tightened or eased its credit policies on 	CRE loans over the past year (as described in question 	12), please select 	the 4 most important reasons among all the possible reasons 	listed below and rank them in order of importance. (Please 	respond to either A, B, or both as appropriate	and rank the 4 most important reasons using a scale ranging from 	4=the most important to 1=the least important.)      

A. 	  	  Possible reasons for tightening credit policies on CRE loans over the past year:	
Responses are not reported when the number of respondents is 3 or fewer. B. 	  	  Possible reasons for easing credit policies on CRE loans over the past year:	
Responses are not reported when the number of respondents is 3 or fewer. **

14. 	    	How have conditions in the CMBS market affected the volume of CRE loan **originations** by your bank	over the past six months?                      

** All RespondentsBanksPercentLed to a substantial decrease    3         27.3 Led to a moderate decrease    1          9.1 Led to no change    7         63.6 Led to a moderate increase    0          0.0 Led to a substantial increase    0          0.0 **Total**   11        100.0 **

For this question,    5    respondents answered “My bank does not originate CRE loans.”

15. 	    	  How have conditions in the CMBS market affected the volume of CRE loan **securitizations** by your bank over	  the past six months?	                

** All RespondentsBanksPercentLed to a substantial decrease    2         22.2 Led to a moderate decrease    3         33.3 Led to no change    4         44.4 Led to a moderate increase    0          0.0 Led to a substantial increase    0          0.0 **Total**    9        100.0 **

For this question,    7    respondents answered “My bank does not securitize CRE loans.”

16. 	    	Apart from normal seasonal variation, how has demand for loans or lines of credit from nonbank financial institutions, 	used to fund their CRE loan pipelines prior to securitization, changed over the past six months? (Please consider the 	number of requests for new spot loans, for disbursement of funds under existing loan commitments, 	and for new or increased credit lines.)      

** All RespondentsBanksPercentSubstantially stronger    0          0.0 Somewhat stronger    0          0.0 About the same    3         50.0 Somewhat weaker    1         16.7 Substantially weaker    2         33.3 **Total**    6        100.0 **

For this question,    9    respondents answered “My bank does not originate these types of loans or credit lines.”

17. 	    	How have your bank’s credit standards for approving applications for loans or lines of credit to nonbank financial 	institutions, used to fund their CRE loan pipelines prior to securitization, changed over the past six months? 	(Please consider applications for new spot loans, and for new or increased credit lines.)      

** All RespondentsBanksPercentTightened considerably    0          0.0 Tightened somewhat    2         33.3 Remained basically unchanged    4         66.7 Eased somewhat    0          0.0 Eased considerably    0          0.0 **Total**    6        100.0 **

For this question,    9    respondents answered “My bank does not originate these types of loans or credit lines.”

18. 	    	In the next six months, a large amount of CRE loans originated in 2006 and currently held in CMBS will need to be refinanced.	Assuming economic activity progresses in line with consensus forecasts, how are the standards that your bank would apply to such CRE	loans **different from** those that you expect to apply to other CRE loans?                      

** All RespondentsBanksPercentConsiderably tighter    0          0.0 Somewhat tighter    3         25.0 About the same    9         75.0 Somewhat easier    0          0.0 Considerably easier    0          0.0 **Total**   12        100.0 **

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