Business Access to Credit Improves, Says Fed Survey
Banks continued to ease standards and terms on loans to businesses during the fourth quarter of 2010, according to the Senior Loan Officer Opinion Survey conducted in January 2011. Meanwhile, banks' lending policies for other loans were little changed from the previous quarter. The survey, conducted quarterly by the Federal Reserve Board of Governors, covers 57 domestic banks and 22 foreign banks operating in the United States.
Credit availability improves for businesses
Overall demand for business loans increased in the fourth quarter, according to the survey. Large and midmarket firms in particular showed greater demand for C&I loans, while a smaller percentage of banks reported higher demand for commercial real estate loans.
"Small and mixed" changes for consumer credit
About 95 percent of banks reported that standards on prime residential mortgage loans were unchanged. It was much the same for nontraditional residential mortgages—87 percent of banks reported little change in their standards, while roughly 13 percent reported tightening their standards.
On the demand side, a moderate percentage of banks saw less demand for residential mortgage loans of all types. "Reported demand for closed-end loans has now declined for two consecutive surveys after having increased during parts of 2009 and 2010," said the Fed.
Banks optimistic about lending quality
February 25, 2011