A Federal Reserve report showed on Monday that banks raised their lending standards for business and consumer loans after three major bank failures, a trend that could slow the economy in the coming months.
The report, known as the Survey of Senior Lending Officers, asked banks whether they had tightened their lending standards by taking steps such as demanding higher credit scores, charging higher interest rates, or taking other steps. taxed, which will make it difficult for businesses and consumers to obtain. Loan.
About 46 percent of all banks said they raised standards for business loans, known as commercial and industrial loans, down from 45 percent in the previous quarter.
The increase was not as dramatic as in previous quarters, but banks were tightening credit before banks failed. A year ago, slightly more banks were easing credit standards than raising them.
Among the survey respondents were 65 US banks and 19 foreign banks with US branches. Results were collected from March 27 to April 7 Silicon Valley Bank And Signature Bank collapsed in early March, setting off the latest round of bank turmoil. First Republic Bank failed a week earlier, the second largest bank failure in US history.
The Fed report said mid-sized banks – those with between USD 50 billion and USD 250 billion in assets, such as the three banks that failed in March – were more likely to report tighter standards. .
Banks also said they were restricting credit for most consumer loans, including auto and credit card loans and home equity lines of credit.
The text of this story is published from a wire agency feed without any modification.
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Updated: 09 May 2023, 05:54 AM IST