I am referring to the advance notice of proposed rulemaking issued last October by the U.S. banking and thrift agencies that explores alternatives for simplifying the capital standard for noncomplex, non-internationally active U.S. depository institutions. This is the so-called bifurcated approach. The advance proposal suggested three possible ways to structure a capital standard for non-complex banking organizations.
According to our bank lending survey for the third quarter of 2020, credit conditions on loans to firms tightened. While banks indicated that their funding and balance sheet conditions remain supportive, higher risk perceptions could weigh on their attitude towards loan creation.