DelhiDesk According to a Federal Reserve report, banks have tightened their lending standards for business and consumer loans in response to three large bank failures. The report, known as the senior loan officers survey, revealed that 46% of all banks have raised standards for business loans, such as demanding higher credit scores and charging higher interest rates, making it harder for consumers and businesses to obtain loans. The report suggests that this trend could slow down the economy in the coming months. Mid-sized banks, with assets between $50bn and $250bn, were more likely to report tighter standards. The banks also revealed that they are restricting credit for most consumer loans, including auto and credit card lending and home equity lines of credit.
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👉 A Federal Reserve report showed banks raised lending standards for business and consumer loans after three large bank failures.
👉 Banks tightened credit standards before the bank failures, with mid-sized banks more likely to report tighter standards.
👉 About 46% of all banks raised standards for business loans, and banks are also restricting credit for most consumer loans.
👉 The survey respondents were 65 US banks and US branches of 19 foreign banks.
👉 The trend of tighter lending standards could slow the economy in the coming months.
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