According to the July 2010 Senior Loan Officer Survey on Bank Lending Practices conducted by the Federal Reserve, banks across the country have, on net, eased standards and terms over the past three months – particularly in areas where there is competition. Most of the easing in standards and terms has been at large domestic banks, the survey says.
Most banks say that demand for commercial and retail lending has not increased dramatically. However, commercial and industrial rates have moved downward in recent months, the report says.
“Domestic survey respondents reported having eased standards and most terms on C&I loans to firms of all sizes, a move that continues a modest unwinding of the widespread tightening that occurred over the past few years,” the report states. “Moreover, this is the first survey that has shown an easing of standards on C&I loans to small firms since late 2006.
“Banks pointed to increased competition in the market for C&I loans as an important factor behind the recent easing of terms and standards.”
