January Senior Loan Officer Survey Includes Many Positive Aspects
Asha G. Bangalore, Northern Trust Global Economic Research
February 2, 2009
The Senior Loan Officer survey of January 2009 contains many noteworthy aspects that bear good tidings. There were fewer bank officers reporting they had tightened loan underwriting standards for commercial and industrial loans for both small and large firms in January compared with December (see charts 1 and 2). The fact that some bank officers have eased mortgage underwriting standards is notable but the levels still exceed the peak reported in 2001 (see charts 1 and 2). In the case of both large and small firms, the demand for loans was weaker in January compared with December. Although the history of these data is short, in 2001, the demand for loans turned around only after the recession had reached its last leg, where as the peak for the number of banks reporting tightening standards peaked slightly ahead.
This is one of the first indicators to point towards a recovery.