The latest Federal Reserve Board survey indicates U.S. banks may be growing more concerned about credit quality.

The Fed said Wednesday that the average spread between banks' riskiest and safest business loans narrowed 9 basis points last month from August, to 118, but widened when foreign lenders were excluded. The average spread for all domestic banks was up 13 basis points, to 172.

The average November spread for business loans by big domestic banks- defined as having more than $7 billion of assets-rose to 172 basis points, up 12 from August. The average November spread for smaller domestic banks increased to 182 basis points, up 14 from August.

The wider spread indicates banks are insisting on a greater reward for taking more risk.

The survey of 348 domestic banks and 50 U.S. branches of foreign banks also found that rates fell regardless of the size of the loan. The average rate last month for a business loan of less than $99,000 was 9.13%, while the average rate for a loan or more than $10 million was 6.1%. Those are down 46 and 66 basis points, respectively.

The average rate charged for the safest loans was 5.91% during the first week of November, 41 basis points lower than in the first week of August. The rate in November for the riskiest loans averaged 7.09%, down 50 basis points from August.

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