Discussion Paper

Is There a Credit Crunch? A View From Fifth District Businesses

Abstract: Rising interest rates and a few bank failures have intensified discussions about tightening credit in the United States and what that might do to businesses' ability to borrow and invest. The Senior Loan Officer Opinion Survey (SLOOS) released by the Federal Reserve Board of Governors indicated that tighter loan standards were evident across loan types and firm sizes, including for commercial and industrial (C&I) loans. In May, we used our Fifth District manufacturing and service sector surveys to collect more information on the demand side of the borrowing equation by asking the extent to which firms are finding it more difficult to obtain credit. In the end, firms reported that credit was either more difficult to obtain or unchanged from last year. However, it is also true that most firms in our sample did not seek credit in the last three months, nor do they intend to seek credit in the remainder of the year — primarily not because of more stringent lending standards but because they do not need the credit to run (or expand) their business.

Keywords: interest rates; credit; 5th district; credit crunch;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Regional Matters

Publication Date: 2023-05-23