US banks 'loosened lending standards'

16 August 2011

Banks in the US loosened credit standards on various loan types across the second quarter of 2011, it has been found.

According to a survey carried out by the Federal Reserve, industrial and commercial lenders noted the easier terms came as a result of increasingly aggressive competition in the sector, Bloomberg reports.

In its quarterly review of senior loan officers, the body stated: "Banks continued to ease lending standards and most terms on all major types of loans other than loans secured by real estate over the past three months."

The news comes after Federal Reserve chairman Ben Bernanke - who committed to a second term as chairman of the Board of Governors of the Federal Reserve in February 2010 - recently agreed to keep the main interest rate at near-zero until the middle of 2013 due to slower-than-expected economic growth.

According to the poll, mortgage lending is likely to remain at a similar level for the remainder of 2011.

By Tony Aynsley

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development