Fed Survey Finds Lending Standards Easing For First Time In Years

Lending standards are showing signs of easing, according to a Federal Reserve bank survey. It’s getting easier to get a new credit card for the first time in three years. For the first time in four years, banks have loosened lending standards for small businesses.

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. Moreover, this is the first survey that has shown an easing of standards on C&I loans to small firms since late 2006.

This is a critical first step in a long road toward an eventual housing recovery. Although one month does not make a trend, the pendulum has to make its way back to the middle position – a location it hasn’t seen in a long time. There has been concern that the supposed increase in regulations our post-financial reform will prevent lending from easing in a meaningful amount to get the economy moving again.

Posted by Jeremy Wright on Aug 19 2010. Filed under Featured News, Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry