MNI BRIEF: Banks Slow Credit Tightening, Demand Weaker - Fed
A lower net share of banks reported tightening lending standards across loan categories in the fourth quarter compared to the third quarter, according to a Federal Reserve survey of bank loan officers. On balance, survey respondents reported weaker demand for commercial and industrial loans to firms of all sizes over the fourth quarter.
The Fed's quarterly Senior Loan Officer Opinion Survey, or SLOOS, also showed banks expect lending standards in 2024 to remain basically unchanged for C&I and residential real estate loans, but to tighten further for CRE, credit card, and auto loans. "In addition, banks reported expecting loan demand to strengthen across all loan categories, and loan quality to deteriorate across most loan types," the report said.