What Is a Bank Lending Survey?
A bank lending survey is a questionnaire circulated by a country's central banking authority to help clarify its understanding of the overall lending environment. 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.
- Bank lending surveys are a common tool employed by central banks to gather information about credit and financial markets to inform their policy decisions.
- These surveys can gather a wide range of quantitative and qualitative information about lending activity, financial market functioning, and the flow of credit from the financial sector to the real economy.
- The U.S. Federal Reserve conducts several bank lending surveys, which cover general lending, timely topics of interest, and small business lending.
Understanding Bank Lending Surveys
Central banks are typically given legal mandates to regulate, supervise, and ensure the stability of the banking system, and to steer the economy toward economic growth, full employment, and price stability through monetary policy. In order to gauge the effectiveness of current policies and guide future policy decisions, they use various tools to gather information about the health of the financial system and the economy.
One of these tools is to directly survey a sample of the banks that they supervise on an ongoing basis to get an estimate of lending activity in the overall industry. Typical bank lending surveys include questions about the number and size 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. This information gives central bank officials some insight into the market demand and supply of credit, potential risks to the banking system and the economy, and the overall flow of credit from the financial system into the real economy.
Federal Reserve Bank Lending Surveys
In the United States, the Federal Reserve conducts several types of bank lending surveys to support monetary policy decisions and management of the financial sector. The main Fed bank lending survey is the Senior Loan Officer Survey, and the Fed also conducts surveys that focus on timely topics of interest and specifically on bank lending to small businesses.
Senior Loan Officer Survey
The Fed circulates its primary bank lending survey, the Senior Loan Officer Opinion Survey on Bank Lending Practices, on a quarterly basis, with the results being used to help shape the Federal Reserve's overall monetary policy. Summaries of the questions and answers can be viewed online at the Federal Reserve's official website.
Senior Financial Officer Survey
The Fed conducts an occasional survey of bank financial officers, the Senior Financial Officer Survey, up to four times a year that asks about bank liability management, financial services, and the functioning of financial markets. This survey is not conducted regularly, nor does it have a fixed set of questions to gather information over time. Rather, it is conducted on an as-needed basis, with specifically targeted questions to address the Fed’s current information needs on timely topics.
Small Business Lending Survey
Also, the Kansas City Fed conducts a national survey on small business lending, the Small Business Lending Survey on behalf of the Federal Reserve Board. This survey is administered quarterly and covers quantitative data on commercial and industrial loans to small businesses and qualitative information about credit standards, terms, and demand for loans. For this survey small businesses are defined as businesses with $5 million or less in annual revenue.