US banks ease lending standards

 
(From the ft.com) US banks eased lending standards to consumers and businesses in the second quarter even as demand for credit remained flat, the Federal Reserve said on Monday. In its quarterly survey of loan officers, taken last month, the US central bank said that companies of all sizes were benefiting from better terms on their loans amid rising competition within the banking industry.
The Fed described this as a “modest unwinding of the widespread tightening that has occurred over the past few years”.

In addition, the US central bank reported that terms had improved on credit to small businesses for the first time since 2006, a significant shift given that lack of credit to small businesses has been partly blamed for holding back the American economic recovery.

Nevertheless, the unchanged demand for credit remains a big concern for policymakers and economists, indicating that even in a growing economy, Americans are still wary of taking on debt to make new purchases or investments.

“Demand is still a big problem, pretty much every sector is deleveraging,” said Julia Coronado, economist at BNP Paribas in New York. She added that the loan survey “is generally in the right direction but it doesn’t alter the idea that we’re in this for a long haul”.