Survey Shows Some Tightening of Credit

U.S. banks have tightened their business lending practices in recent months, citing a reduced tolerance for risk and a more uncertain economic outlook, according to a Federal Reserve Board survey of bank officers. But though banks became “somewhat more cautious lenders,” the Fed said the bankers’ responses “do not suggest a widespread reduction in credit availability.” The quarterly poll revealed that 11% of large U.S. banks surveyed tightened credit standards for large and middle-market customers during the last three months, compared with 9% in the November survey. Big domestic banks also tightened requirements on loans to small businesses. Nearly 10% of loan officers surveyed said they had toughened standards for small borrowers, compared with 2% in the last survey. The central bank questioned loan officers at 55 major U.S. banks and 21 domestic branches of foreign banks.