Lending Conditions Ease Slightly, Says Fed Survey
Banks reported easing credit standards and terms on nearly all types of business and consumer loans in recent months, according to a Federal Reserve survey. The quarterly Senior Loan Officer Opinion Survey covered 55 domestic banks and 22 U.S. branches of foreign banks.
Increased competition drove banks to ease lending standards and terms on commercial and industrial (C&I) loans. Lending conditions improved especially for large and midmarket firms, or those with annual sales of $50 million or more. A modest percentage of banks also reported stronger demand for C&I loans as businesses shifted from other funding sources, said the report.
Real estate lending remains tight
When asked about their expectations for residential mortgage originations in the second half of the year, about 75 percent of banks said they expect the pace of originations to remain at about the same level, largely the result of lower demand among creditworthy borrowers and weaker forecasts for the economy and house prices.
Consumer demand loosens up
August 30, 2011