Senior Loan Officer Survey
7 November 2017 by Mark Holman
In the same way that the Credit Conditions Survey is one of the best gauges for ageing the economic cycle in the UK, the Fed’s Senior Loan Officer Survey gives us a similar feel for the US.
The third quarter survey results were published yesterday, and with few surprises.
For those looking for signs that the banks were tightening their belts as an indication of the ageing cycle, there was little to hang your hats on with the banks only really pointing at credit card and auto loans within the consumer sector where they had tightened standards. Other areas of consumer lending were broadly unchanged. Loan demand from the consumer side held up well, and in some areas was increasing as borrowers’ confidence and ability to service their debt improved.
As far as secured lending to the consumer was concerned, all categories showed a small easing in credit conditions.
For the commercial and industrial sectors there was a small easing of lending standards, with increased competition being the main driver of this easing, coupled with a small reduction in demand.
Finally on to commercial real estate lending, there was a tightening in the multi family sector, but all other areas remained unchanged. Demand had modestly reduced.
Our take on all of this is very simply that the environment is basically unchanged. There is modest tightening where we would expect it, but the economic cycle despite being 9 years old, still has life in it and is likely to become the longest cycle since the second world war.
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