US banks 'reluctant to lend due to Europe'

8 November 2011

Banks in the US have become more reluctant to lend to large companies in the last three months due to the knock-on impact of the eurozone crisis, new data has shown.

Figures published by the Federal Reserve today (8 November) have shown that throughout the previous quarter, just ten per cent - five out of 50 - of all domestic financiers decided to relax their lending criteria.

This represents something of a change in the trend seen prior to that, when credit conditions had been steadily easing since the end of the global economic downturn.

However, two banks indicated they had actually tightened their criteria throughout the previous quarter due to fear of the potential worldwide effect issues in eurozone states such as Greece and Italy and after America's credit rating was downgraded three months ago.

Millan Mulraine of TD Securities told the Financial Times: “Overall, the report underscored the fallout from the heightened global economic and financial market uncertainties."

By Asim Shah

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