The October 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months. The results included responses from 69 domestic banks and 21 U.S. branches and agencies of foreign banks.

Regarding loans to businesses, the October survey results indicated that, on balance, banks left their standards on commercial and industrial (C&I) loans basically unchanged while tightening standards on commercial real estate (CRE) loans over Q3/16.

On demand for C&I loans, a modest net fraction of domestic banks reported weaker demand from large and middle-market firms, while demand from small firms changed little, on balance.

Regarding the demand for CRE loans, a moderate net fraction of banks reported stronger demand for construction and land development loans, while demand for loans secured by multifamily residential and nonfarm nonresidential properties remained basically unchanged on net.

The survey included two special questions on C&I loan demand. The first asked for more detail on the reasons why customer borrowing from banks may have shifted to or from other sources of funding, and banks indicated that changes in both price and nonprice terms associated with other sources of funding contributed to the shifts. C&I loan growth at commercial banks slowed from an annual rate of nearly 9% in Q2/16 3.5% in Q3/16, consistent with the reportedly weaker C&I loan demand at large and middle-market firms.

A second special question asked respondents to assess the outlook for C&I loan demand over the next six months compared with current conditions. Respondents reported that, over the next six months, they expect demand for C&I loans from large and middle-market firms as well as small firms to remain basically unchanged on net. Meanwhile, a moderate net fraction of foreign banks reported that their outlook for the demand for C&I loans over the next six months was somewhat stronger compared with current conditions.