American banks have toughened credit standards
5 February 2008Banks of the USA have toughened credit standards and terms for the companies and consumers on the background of the pessimistic economic forecast.
Research has also shown that demand for loans among the organizations and households has decreased for last three months.
Banks, which have toughened credit conditions “have specified less favorable or more uncertain economic forecast, deterioration of specific problems of branch, and decrease in tolerance to risk as on the reason of more severe credit policy”.
The report became the next attribute of difficulties in the US economy, which growth was slowed down up to 0,6 % in the fourth quarter 2007.
As the housing market of the USA has fallen in 2007 and has caused a wave of nonpayments under the mortgage. Central Bank of the USA is concerned, that toughening of terms of credits’ delivery will muffle consumer and business charges, strengthening delay of economy as a whole.
Many banks have already toughened standards by all kinds of mortgages. More than half of banks have told, that they became stricter even to solvent borrowers.
About 60 % of banks have informed that demand for hypothec credits has decreased. As many respondents have declared, that they have toughened terms for direct mortgage loan.
