Banks Adopt Tighter Terms for Lending, Survey Says

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BY SUDEEP REDDY, MARSHALL ECKBLAD AND DAN FITZPATRICK

Most U.S. banks tightened lending to consumers and businesses in recent months, an ominous sign for an economic recovery pegged to easing the flow of credit to borrowers.

In a survey of banks released Monday, the Federal Reserve said about two-thirds of banks' loan officers reported that they tightened terms for business loans over the past three months. While that was better than the 85% reporting in October that they had tightened terms -- such as the cost of credit or collateral requirements -- over the prior quarter, the survey still shows how strict lending standards instituted in the wake ...

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