In the second quarter, banks lowered lending standards for businesses and households, according to a Fed survey.

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WASHINGTON, Aug 2 (Reuters) – Loan officers at US banks announced an easing of business loan standards and conditions in the second quarter as the economy accelerated amid wider reopening and rising coronavirus vaccination rates.

The officers also said in a Federal Reserve survey released on Monday that demand for business loans from firms of all sizes has increased.

“Major net bank stocks … highlighted better or less uncertain economic outlook, more aggressive competition from other banks from non-bank lenders, and improved industry problems as important reasons,” the US central bank said in its quarterly review. …

According to data from the US Department of Commerce last Thursday, the US economy expanded 6.5% year-on-year in the second quarter, pushing gross domestic product above its pre-pandemic peak.

On the consumer side, banks reported softening standards for all three categories of loans – credit card loans, car loans and other consumer loans – and saw higher demand for them over the same period.

The Fed surveyed loan officers from 75 local banks and 22 branches and agencies of foreign banks in the United States. (Reporting by Lindsey Dunsmuir, editing by Paul Simao)

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