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Analyzing supply and demand for business loans using microdata from the Senior Loan Officer Survey

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  • Dylan Hogg

Abstract

Supply and demand factors each have a role in determining the level of business lending in the economy, with most hard data showing only their combined effect on prices and quantities. The Bank of Canada’s Senior Loan Officer Survey (SLOS) helps to separate supply from demand effects by gathering information from financial institutions on their lending (supply) conditions as well as on customer demand for loans. This note examines the information content of the SLOS using institution-level microdata. We find both supply and demand indicators from the SLOS have leading-indicator properties for future business loan growth. Finally, we conduct a counterfactual exercise using SLOS data to examine the role of supply and demand during the financial crisis. We find that supply and, more specifically, heightened risk perception were the key contributors to the contraction of business credit witnessed in that period.

Suggested Citation

  • Dylan Hogg, 2021. "Analyzing supply and demand for business loans using microdata from the Senior Loan Officer Survey," Staff Analytical Notes 2021-13, Bank of Canada.
    • Handle: RePEc:bca:bocsan:21-13
    DOI: 10.34989/san-2021-13
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    References listed on IDEAS

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    1. Del Giovane, Paolo & Eramo, Ginette & Nobili, Andrea, 2011. "Disentangling demand and supply in credit developments: A survey-based analysis for Italy," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2719-2732, October.
    2. Umar Faruqui & Paul Gilbert & Wendy Kei, 2008. "The Bank of Canada's Senior Loan Officer Survey," Bank of Canada Review, Bank of Canada, vol. 2008(Autumn), pages 57-64.
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    Cited by:

    1. Scott, Francisco Albert & Kuethe, Todd H. & Kreitman, Ty, 2022. "The Supply and Demand of Agricultural Loans," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322303, Agricultural and Applied Economics Association.
    2. Ty Kreitman & Todd Kuethe & David B. Oppedahl & Francisco Scott, 2022. "The Impact of Supply and Demand Changes on Non-Real-Estate Agricultural Loans," Research Working Paper RWP 22-06, Federal Reserve Bank of Kansas City, revised 29 Oct 2025.

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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G01 - Financial Economics - - General - - - Financial Crises
    • G2 - Financial Economics - - Financial Institutions and Services

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