DEFINITION of 'Bank Lending Survey'

 A bank lending survey a questionnaire circulated by a country's central banking authority to help clarify their understanding of the overall lending environment. Typical bank lending surveys include questions about the number of loans made, the interest rates on loans, demand for new loans, default rates, differences between commercial and retail lending, and information on a bank's existing loan and financial portfolios. Surveys are typically circulated quarterly, but may be circulated more or less frequently depending on a central bank's role in regulating lending and the overall state of the economy.

BREAKING DOWN 'Bank Lending Survey'

In the United States, the Federal Reserve circulates its primary bank lending survey quarterly, with the results being used to help shape the Federal Reserve's overall monetary policy. Participating banks typically have two weeks from the receipt of a survey to complete and return. Summaries of the questions and answers can be viewed online at the Federal Reserve's official website.

Survey Example

A typical survey from January 2018 covered the three months prior and was completed by 71 domestic banks and 23 U.S. branches and agencies of foreign banks. This survey found that:

"A moderate net percentage of banks reported that they eased standards for C&I loans to large and middle-market firms over the past three months, while lending standards remained basically unchanged, on net, for loans to small firms.

Moderate net fractions of banks reported tightening their standards for loans secured by multifamily residential properties and loans for construction and land development purposes, while banks reportedly left standards for loans secured by nonfarm nonresidential properties basically unchanged on net.

On balance, banks reported that standards for residential home purchase mortgage lending remained basically unchanged over the past three months, with the exception of mortgages eligible to be securitized by government sponsored enterprises.

A set of special questions asked banks about their expectations for lending practices and conditions over 2018, assuming that economic activity progresses in line with consensus forecasts. On balance, banks reported expecting to ease standards on residential mortgages and C&I loans to larger firms while tightening standards on CRE loans and credit card loans.

A second set of special questions asked about banks' expectations for asset quality for 2018, as measured by their outlook for loan charge-offs and delinquencies, assuming that economic activity progresses in line with consensus forecasts. Regarding expectations for the performance of loans to businesses, modest net fractions of banks reported that they expect the quality of syndicated nonleveraged loans and nonsyndicated loans to large and middle-market firms to improve over 2018."

Updated reports on lending conditions can be found here.

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