WASHINGTON - A quarterly Federal Reserve survey released on Friday found that banks are tightening their credit standards on commercial and industrial loans because of concerns about the economy.
"Banks became significantly more cautious lenders over the past three months," said the introduction to the Fed's Senior Loan Officer Opinion Survey, which polled 57 large domestic banks and 21 U.S. branches of foreign banks.
Nearly one-quarter of domestic banks surveyed reported tighter requirements for C&I loans in the previous three months, the highest level since November 1998. None had eased their standards on either C&I loans or commercial real estate loans.
For the fourth straight quarter, the survey found falling demand for home mortgage loans. Banks reported increased demand for loans to purchase and hold securities from both broker-dealers and private individuals.