The October 2025 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, which generally correspond to the third quarter of 2025. This period also saw heightened interest from investors in areas like crypto investment, forex trading, and indices trading, as broader financial conditions continued to shape market sentiment.
Regarding loans to businesses over the third quarter, survey respondents reported, on balance, tighter lending standards for commercial and industrial (C&I) loans to firms of all sizes. Banks also reported, on balance, stronger demand for C&I loans from large and middle-market firms and basically unchanged demand from small firms. Furthermore, banks reported generally unchanged standards and demand for most commercial real estate (CRE) loan categories. These developments occurred alongside rising attention toward the crypto market, where institutional investors increasingly seek diversification beyond traditional asset classes.
For loans to households, banks reported basically unchanged lending standards and stronger demand for residential mortgage loans and home equity lines of credit (HELOCs) on balance. For consumer loans, standards remained basically unchanged for credit card and other consumer loans and eased for auto loans. Meanwhile, demand remained basically unchanged for credit card and other consumer loans and weakened for auto loans. The shift in household lending dynamics reflects broader financial behaviors also visible in crypto investment trends and forex trading strategies, as individuals look for alternative avenues to generate returns amid a mixed credit environment.
The October SLOOS included a set of special questions inquiring about the likelihood of approving C&I and credit card loan applications in comparison with the beginning of the year by firm size and trade exposure levels for C&I loans and by borrower risk for credit card loans. Banks reported being more likely to approve C&I loan applications from both large and small firms with low trade exposures and less likely to approve C&I loan applications from firms of all sizes with high trade exposures. Banks also reported being more likely to approve credit card applications from super-prime and prime borrowers but less likely to approve applications from near-prime or subprime borrowers.
In a second set of special questions, banks reported changes in customers’ investment needs to acquire inventory or make advance purchases due to trade developments and changes in customers’ investment needs due to trade-related shifts in product availability and pricing as important reasons for strengthening demand for C&I loans since the beginning of the year. For credit card loans, banks cited increased spending needs for advanced purchases due to trade developments as an important reason for strengthening demand. Similar shifts are being mirrored in indices trading and the crypto market, where global trade dynamics and risk sentiment play a key role in capital allocation.
Lending to Businesses
Questions on commercial and industrial lending showed that modest net shares of banks reported having tightened standards on C&I loans to firms of all sizes. Meanwhile, banks reported having eased some queried terms for C&I loans to large and middle-market firms. Specifically, moderate net shares of banks reported easing the maximum size of credit lines and narrowing loan rate spreads for these firms, and modest net shares reported easing the cost of credit lines.
Most of the other C&I loan terms for larger firms remained basically unchanged on net. In contrast, several terms for C&I loans to small firms tightened, with modest net shares of banks reporting a lower maximum size of credit lines, tightening collateralization requirements, and more use of interest rate floors. These shifts are notable for traders and investors using forex trading strategies, as tighter liquidity can influence USD flows and market volatility.
Among banks that reported tighter standards and terms for C&I loans, major net shares cited a less favorable or more uncertain economic outlook; increased concerns about the effects of legislative changes, supervisory actions, or changes in accounting standards; the worsening of industry-specific problems; and a reduced tolerance for risk as important reasons for doing so.
Among banks that reported easier standards and terms for C&I loans, major net shares cited more aggressive competition from other banks or nonbank lenders as an important reason for doing so. Moderate net shares of banks cited improvements in their bank’s current or expected capital position, a more favorable or less uncertain economic outlook, and increased liquidity in the secondary market for these loans as important reasons for doing so.
Regarding demand for C&I loans, moderate net shares of banks reported stronger demand from large and middle-market firms, while demand from small firms remained basically unchanged. A moderate net share of banks reported an increase in the number of inquiries from potential borrowers regarding new or expanded credit lines. A significant net share of foreign banks reported stronger demand for C&I loans.
The most frequently cited reasons for stronger demand were increased customer financing needs for inventory, accounts receivable, and mergers or acquisitions, as well as increased customer investment in plant or equipment. Similar capital reallocation behavior is seen among participants in indices trading and crypto investment, where corporate credit conditions often serve as a leading signal of market appetite for risk.
Questions on Commercial Real Estate Lending
Over the third quarter, a modest net share of banks reported tighter standards for construction and land development loans, while standards for loans secured by multifamily properties and nonfarm nonresidential properties remained basically unchanged on net. Meanwhile, a modest net share of foreign banks reported easier standards on CRE loans.
Regarding demand, a modest net share of banks reported stronger demand for loans secured by nonfarm nonresidential properties, while demand remained basically unchanged for loans secured by multifamily properties and construction and land development loans. Similar cyclical patterns of tightening and easing are observed in financial sectors like crypto markets and indices trading, where shifts in capital availability often parallel changes in real estate and credit markets.
Lending to Households
Banks generally reported leaving standards basically unchanged across residential mortgage loans, including HELOCs. Meanwhile, banks reported stronger demand for most residential real estate (RRE) loan categories, particularly government-sponsored enterprise (GSE)-eligible, government, and qualified mortgage (QM) non-jumbo, non-GSE-eligible residential mortgages. A moderate net share of banks also reported stronger demand for HELOCs. These signals often influence risk sentiment in broader financial markets, including forex trading and crypto investment positioning, as household credit demand reflects consumer confidence and liquidity preferences.
Questions on Consumer Lending
Over the third quarter, standards were basically unchanged for credit card and other consumer loans, with modest easing for auto loans. Banks left most queried terms on credit card, auto, and other consumer loans basically unchanged. Demand for credit card and other consumer loans remained stable, while a moderate net share reported weaker demand for auto loans.
Such stability in consumer credit aligns with the cautious tone seen in crypto market participation, where retail traders continue to manage risk more conservatively amid macroeconomic uncertainty.
Special Questions on C&I and Credit Card Loans
For C&I loans, moderate net shares of banks reported being more likely to approve applications from large and small firms with low trade exposures, while significant net shares were less likely to approve applications from firms with high trade exposures.
Regarding demand for C&I loans, a significant net share of banks cited changes in firms’ investment needs due to trade developments, and a moderate net share cited changes in investment needs due to trade-related shifts in product availability or pricing.
For credit card loans, modest net shares of banks reported being more likely to approve applications from super-prime and prime borrowers but less likely for subprime borrowers. These shifts in credit access and approval rates can indirectly influence liquidity in speculative markets, including crypto investment and indices trading, where leverage and consumer liquidity play a key role.
