U.S. Bank Lending Still Subdued, Europeans Tighten Standards

[Stocks-to-Watch]

Banks in the U.S. kept relatively tight lending standards in the fourth quarter, as their European counterparts tightened their standards considerably, the Fed wrote in a report today. The more stringent standards may be hurting the economy, as businesses find loans harder to come by, the Wall Street Journal noted. At the same time, evidence in the report that demand for loans has increased is a good sign for the economy.

Every quarter, the Fed surveys senior loan officers at banks. After loosening loan standards over the past couple of years, banks started to tighten standards in the second half of 2011.

U.S. banks may be enticing more customers as European banks become more reluctant to lend, the Fed said.



Original Article Source by Barrons.com