Why should they when they have Obama and your tax money to bail them out? LOL!!
May 3 (Bloomberg) -- Most banks in the U.S. didnt tighten lending standards during the first quarter, according to a Federal Reserve survey that signals a possible thaw in bank credit.
The smallest proportion of banks in two years restricted standards on business lending, the Feds survey of senior loan officers released today showed. Also, more banks than in the previous survey expressed a greater willingness to make installment loans to consumers, the central bank said in Washington.
This is just one more feather in the cap of the recovery in the financial markets, said Michael Darda, chief economist at MKM Partners LLC in Greenwich, Connecticut. Were going in the right direction. The report is on an improving track which is consistent with improving spreads in the credit markets.
The shortage of credit, as banks tightened loan standards and many consumers and businesses paid off debt, has impeded the recovery. The central bank cited tight credit among the reasons for its April 28 decision to keep interest rates at zero to 0.25 percent for an extended period.
The April survey indicated that most banks kept their lending standards unchanged, according to the Feds quarterly survey of senior loan officers. The survey also indicated that loan demand generally weakened further.
Unidentified Respondents
The survey of loan officers at 56 U.S. banks and 23 U.S. branches of foreign banks was conducted from March 30 to April 13, the Fed said. The report doesnt identify respondents. The panel of 56 banks had about $6.6 trillion in assets, representing a little less than two-thirds of the assets of all domestically chartered, federally insured commercial banks.
Since December 2008, commercial and industrial loans have dropped to $1.27 trillion from $1.62 trillion, while commercial real-estate loans have declined to $1.6 trillion from $1.73 trillion, according to a separate statistical release from the Fed for the week ending April 21.
Standards for commercial and industrial lending were little changed in the survey, with 48 of 56 banks saying they had not changed standards for firms with more than $50 million in sales and 52 of 54 banks saying they had not changed standards for smaller firms.
For the second quarter in a row, more banks eased standards than tightened standards. It was the first time since 2006 that standards eased for two consecutive quarters.
Demand Declined
For consumers, credit standards on prime residential mortgages were little changed, with six banks tightening standards, five banks easing standards and 42 banks leaving standards unchanged. Demand for mortgages declined on net, with 18 banks reporting weaker demand and 11 reporting stronger demand.
Among 33 respondents, 23 banks said their standards were tighter on terms for small businesses credit-card accounts than long-trend levels, with some charging higher interest rates and annual fees and requiring higher credit scores over the past six months. About equal numbers of banks said applications for new accounts or increases in credit lines had increased or decreased in the past six months, the Fed said.
The interest-rate setting Federal Open Market Committee said in its April 28 statement that tight credit is constraining household spending. The Fed said that while bank lending continues to contract, financial conditions remain supportive of economic growth.
Economy Grew
The Commerce Department reported April 30 that the economy grew by 3.2 percent in the first quarter, after growing 5.6 percent in the fourth quarter of 2009.
Banks continued to tighten standards for commercial real estate, according to the survey. Less banks tightened standards than in the previous survey which was released Feb. 1. Of 56 respondents, eight banks reported tightening standards and only one reported easing standards for commercial real estate loans.
While the report showed the commercial real estate market may not have reversed its slide yet, the proportion of banks that tightened standards on such loans dropped to the lowest since 2006, the Fed said. The proportion of banks reporting weaker demand for such borrowing also shrank to the lowest in more than three years.
May 3 (Bloomberg) -- Most banks in the U.S. didnt tighten lending standards during the first quarter, according to a Federal Reserve survey that signals a possible thaw in bank credit.
The smallest proportion of banks in two years restricted standards on business lending, the Feds survey of senior loan officers released today showed. Also, more banks than in the previous survey expressed a greater willingness to make installment loans to consumers, the central bank said in Washington.
This is just one more feather in the cap of the recovery in the financial markets, said Michael Darda, chief economist at MKM Partners LLC in Greenwich, Connecticut. Were going in the right direction. The report is on an improving track which is consistent with improving spreads in the credit markets.
The shortage of credit, as banks tightened loan standards and many consumers and businesses paid off debt, has impeded the recovery. The central bank cited tight credit among the reasons for its April 28 decision to keep interest rates at zero to 0.25 percent for an extended period.
The April survey indicated that most banks kept their lending standards unchanged, according to the Feds quarterly survey of senior loan officers. The survey also indicated that loan demand generally weakened further.
Unidentified Respondents
The survey of loan officers at 56 U.S. banks and 23 U.S. branches of foreign banks was conducted from March 30 to April 13, the Fed said. The report doesnt identify respondents. The panel of 56 banks had about $6.6 trillion in assets, representing a little less than two-thirds of the assets of all domestically chartered, federally insured commercial banks.
Since December 2008, commercial and industrial loans have dropped to $1.27 trillion from $1.62 trillion, while commercial real-estate loans have declined to $1.6 trillion from $1.73 trillion, according to a separate statistical release from the Fed for the week ending April 21.
Standards for commercial and industrial lending were little changed in the survey, with 48 of 56 banks saying they had not changed standards for firms with more than $50 million in sales and 52 of 54 banks saying they had not changed standards for smaller firms.
For the second quarter in a row, more banks eased standards than tightened standards. It was the first time since 2006 that standards eased for two consecutive quarters.
Demand Declined
For consumers, credit standards on prime residential mortgages were little changed, with six banks tightening standards, five banks easing standards and 42 banks leaving standards unchanged. Demand for mortgages declined on net, with 18 banks reporting weaker demand and 11 reporting stronger demand.
Among 33 respondents, 23 banks said their standards were tighter on terms for small businesses credit-card accounts than long-trend levels, with some charging higher interest rates and annual fees and requiring higher credit scores over the past six months. About equal numbers of banks said applications for new accounts or increases in credit lines had increased or decreased in the past six months, the Fed said.
The interest-rate setting Federal Open Market Committee said in its April 28 statement that tight credit is constraining household spending. The Fed said that while bank lending continues to contract, financial conditions remain supportive of economic growth.
Economy Grew
The Commerce Department reported April 30 that the economy grew by 3.2 percent in the first quarter, after growing 5.6 percent in the fourth quarter of 2009.
Banks continued to tighten standards for commercial real estate, according to the survey. Less banks tightened standards than in the previous survey which was released Feb. 1. Of 56 respondents, eight banks reported tightening standards and only one reported easing standards for commercial real estate loans.
While the report showed the commercial real estate market may not have reversed its slide yet, the proportion of banks that tightened standards on such loans dropped to the lowest since 2006, the Fed said. The proportion of banks reporting weaker demand for such borrowing also shrank to the lowest in more than three years.
