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Federal Reserve Survey Shows Tighter Lending Standards, Weakening Credit Demand - ABI

The Federal Reserve said yesterday that a growing number of banks reported tightening their standards for some loans in the fourth quarter and said they expected loan demand and performance to weaken, the Wall Street Journal reported. After a year in which banks continued to lend freely despite steadily rising interest rates, the Fed’s January survey of senior loan officers showed an increasing number of institutions bracing for a lending slowdown. “Banks reported expecting to tighten standards for all categories of business loans as well as credit-card loans and jumbo mortgages,” the survey said. “Meanwhile, banks anticipate that loan performance will deteriorate for all surveyed categories.”

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