U.S. Banks Start to Ease Limits on Lending
Big banks are beginning to loosen their tight grip on lending, creating a new opening for consumer and business borrowing. The U.S. Office of the Comptroller of the Currency (OCC) reports banks relaxed the criteria for businesses and consumers to obtain credit during the 18 months leading up to June 30, 2013. Fueling the loosening is a rosier economic picture, competition for a limited pool of loans, and a sustained low-interest-rate environment that has banks reaching for returns. The comptroller's report said it would still classify most banks' lending standards as "good or satisfactory" but did strike a cautionary tone. "The more [banks] loan, just naturally there is going to be more risk. It's a matter of how well they can control that risk," said Bob Piepergerdes, the OCC's director for retail credit risk. The OCC has already prodded banks to stop easing up standards on so-called leveraged loans, made to companies with high levels of debt, prompting big banks to step away from some deals.
From "U.S. Banks Start to Ease Limits on Lending"
Wall Street Journal (01/31/14) Tracy, Ryan; Chaudhiri, Saabira
Big banks are beginning to loosen their tight grip on lending, creating a new opening for consumer and business borrowing. The U.S. Office of the Comptroller of the Currency (OCC) reports banks relaxed the criteria for businesses and consumers to obtain credit during the 18 months leading up to June 30, 2013. Fueling the loosening is a rosier economic picture, competition for a limited pool of loans, and a sustained low-interest-rate environment that has banks reaching for returns. The comptroller's report said it would still classify most banks' lending standards as "good or satisfactory" but did strike a cautionary tone. "The more [banks] loan, just naturally there is going to be more risk. It's a matter of how well they can control that risk," said Bob Piepergerdes, the OCC's director for retail credit risk. The OCC has already prodded banks to stop easing up standards on so-called leveraged loans, made to companies with high levels of debt, prompting big banks to step away from some deals.
From "U.S. Banks Start to Ease Limits on Lending"
Wall Street Journal (01/31/14) Tracy, Ryan; Chaudhiri, Saabira
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