Senior Loan Officer Opinion Survey on Bank Lending Practices (SOSLP)

What Is the Senior Loan Officer Opinion Survey on Bank Lending Practices (SOSLP)?

The Senior Loan Officer Opinion Survey on Bank Lending Practices (SOSLP) is a quarterly survey of up to 80 large domestic banks and 24 parts of international banks. Conducted by the Federal Reserve Board, the survey is completed so as to be examined at Federal Open Market Committee (FOMC) gatherings.

The FOMC utilizes the surveys to get a clearer image of credit and lending, which can impact choices on setting interest rates and discount rates. The survey frequently gets broad coverage from the business press and in the scholarly community. Likewise, the SOSLP is remembered for the Fed report to Congress on Availability of Credit to Small Businesses, which is created at regular intervals.

Senior Loan Officer Opinion Survey on Bank Lending Practices (SOSLP) Works

The Senior Loan Officer Opinion Survey on Bank Lending Practices accumulates data on how loan officers feel about recent and potential policy changes, the standards and terms of bank lending rehearses, the state of business and household demand for loans and different products, among different subjects of current interest.

All points examined connect with both personal and commercial bank customers. For instance, past surveys have zeroed in on changes in the accessible lines of credit and the utilization of interest rate floors being set for floating rate loan agreements for businesses. For consumers, subjects reflected issues, for example, loans in areas with falling energy prices and the impact of credit scores on credit card applications.

The Fed initially started surveying banks and their lending rehearses in 1964. Throughout the long term, the survey has been adjusted, with the number of respondents decreasing. The Fed is authorized to conduct the survey up to six times each year. Notwithstanding, in many years there are just four surveys each year, however five were conducted in 2020.

10%+

Forbearance rate at many banks for residential and commercial mortgages secured by pay creating properties, as indicated by the October 2020 SOSLP survey.

The current size and attributes of the survey respondents have been in effect beginning around 2012. Banks must have no less than $2 billion in assets, of which commercial and industrial loans must address under 5% of those assets. Since the Fed goes for the gold, somewhere in the range of two and ten banks are incorporated from every Federal Reserve District.

The survey generally incorporates 25 inquiries and a number of special inquiries regarding development in banking rehearses. They cover rehearses for the previous three months, yet in addition deal with expectations for the approaching quarter and year. While certain inquiries are quantitative, most are qualitative.

The surveys have come to cover progressively convenient subjects, for instance, giving the Fed knowledge into bank forbearance policies and trends in response to the 2020 economic crisis.

Real Life Example of Senior Loan Officer Opinion Survey on Bank Lending Practices (SOSLP)

The January 2019 SOSLP tended to changes in the standards and terms on — and demand for — bank loans to businesses and households over the prior 90 days, which generally compares to the fourth quarter of 2018. Responses were received from 73 domestic banks and 22 foreign banks.

With respect to businesses, respondents to the January 2019 survey indicated that, on balance, banks fixed their standards for commercial real estate, while terms for commercial and industrial loans were essentially unchanged. Demand for business loans debilitated.

Concerning loans, credit card standards fixed. In any case, standards remained something very similar for most residential real estate loans and consumer loans.

In taking a gander at the year ahead, banks reported hoping to fix standards for all categories of business loans — as well as credit card loans and jumbo mortgages — in anticipation a decline in the value of collateral. Demand for most loan types is expected to debilitate also.

Features

• The voluntary survey surveys up to 80 large domestic banks and 24 parts of international banks.
• The Senior Loan Officer Opinion Survey on Bank Lending Practices is a survey the Federal Reserve conducts to gain understanding into bank lending practices and conditions.
• The Fed is authorized to conduct the survey up to six times each year, albeit four surveys each year is commonplace.