Katusa Research · Market Sentiment
Bank Lending Standards: The Fed SLOOS Chart Since 1990
Net percent of banks tightening standards on commercial and industrial loans, from the Fed’s Senior Loan Officer Opinion Survey. Quarterly.
A net 8.1% of US banks are tightening C&I lending standards as of Q2 2026, up from 5.3% the quarter before. The 2008 crisis peaked at 83.6%. The easiest conditions on record came in mid-2021 at -32.4%.
| Reading | Value | When |
|---|---|---|
| Current | +8.1% | Q2 2026 |
| Prior quarter | +5.3% | Q1 2026 |
| Record tightening | +83.6% | Q4 2008 |
| Record easing | -32.4% | Q3 2021 |
The Gauge
How to Read the SLOOS
Every quarter the Fed asks senior loan officers a plain question: are you making it harder or easier for businesses to borrow? The answer, netted out, is this line. Above zero, credit is tightening. Below zero, banks are competing to lend.
Credit is the economy’s oxygen. Sustained spikes in this survey showed up before or during the recessions of 1990, 2001, 2008 and 2020. Banks see stress in their loan books before it reaches earnings reports.
Context
What +8% Means Now
Mild tightening, and creeping in the wrong direction. Readings under 20% have usually coexisted with growth. The danger zone starts when the number spikes toward 40% and up, which is where every modern recession has taken it. Watch the trend more than the level.
Reading the Gauge
What Tightening or Easing Means
A negative reading means banks are competing to lend: credit is cheap, easy and plentiful, which fuels growth and risk-taking. A positive reading means banks are pulling back. Companies that depend on borrowed money feel it first, then hiring, then the broad economy. The level matters less than the direction and speed.
| Range | What it means |
|---|---|
| Below 0% | Easing. Banks are chasing borrowers. The 2021 record was -32.4%. |
| 0% to 20% ← TODAY | Mild tightening. Usually coexists with growth. Today: +8.1%. |
| 20% to 40% | Meaningful squeeze. Credit-sensitive sectors start to crack. |
| Over 40% | Recession zone. 1990, 2001, 2008 (peak 83.6%) and 2020 all spiked here. |
FAQ
Frequently Asked Questions
What is the SLOOS?
The Senior Loan Officer Opinion Survey, run quarterly by the Federal Reserve. It asks banks whether they’re tightening or loosening lending standards across loan types. This chart shows the net percent tightening on commercial and industrial loans to large and mid-size firms.
Why are bank lending standards worth watching?
Credit contraction leads economic contraction. Banks tighten when their loan books sour, and that shows up in this survey quarters before it shows up in GDP or unemployment.
What is the current reading?
A net 8.1% of banks tightening as of Q2 2026. For scale, the 2008 peak was 83.6%.
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