Recent changes to the Federal Reserve's survey of terms of business lending

Federal Reserve Bulletin, August, 1998 by Thomas F. Brady, William B. English, William R. Nelson

results that control for the loan characteristics measured by the survey show that the estimated difference in rates between loans in the minimal-risk category and those in the acceptable-risk category is about 75 basis points--about 50 basis points less than the difference between the average rates on loans in these categories shown in chart 2 (table 3).

[Chart 3 ILLUSTRATION OMITTED]

3. Coefficients from cross-section regression equations for the effective loan rate, by type of institution, May 1998