Bank Lending Standards

Almost everyone I know has been turned down for a loan over the past year.

This Federal Reserve study which says most banks are not tightening lending standards seems counter-intuitive to me.

I used to have over $100,000 in credit card funds available to me. Now it is down below $35,000.

I’ve experienced the credit crunch. My available credit on a number of cards has been reduced.

As long as the debt securitization markets are locked up, there’s not going to be an economic recovery. There’s a fundamental loss of faith in the security markets. People don’t want to buy bonds or stocks backed by securities. Commercial real estate is also dead.

The Los Angeles Times says:

Fewer U.S. banks tightened lending standards for companies and consumers in the third quarter as the economy grew for the first time in more than a year, a Federal Reserve survey showed.

Demand for most types of loans weakened at a smaller number of banks than in the second quarter, the Fed also said Monday in its quarterly Senior Loan Officer survey. For prime residential mortgages, a larger number of banks reported stronger demand, the central bank said.

The report helps explain why Fed policymakers last week said “tight credit” remains a drag on the economy and pledged to keep their benchmark interest rate near zero for an “extended period.” JPMorgan Chase & Co. is among the banks that have reduced lending in response to stricter underwriting standards for consumer loans and lower demand from companies.

“It will be helpful if the banks were more prepared to lend, because there are creditworthy borrowers that are having difficulty getting credit,” said Brian Bethune, chief financial economist at IHS Global Insight.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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