In May 2001, the net share of domestic and foreign commercial banks’ senior loan officers who reported tightening standards for commercial and industrial loans in 2001:IIQ fell to 50.9% for large and mid-size firms and 36.4% for small ones, the first slowdown in the tightening trend since 1999:IIIQ. This year’s first-quarter tightening was mostly reflected in higher spreads on riskier loans. Collateralization requirements and credit-line limits were affected least. The three most important reasons respondents gave for tightening their lending standards were a less favorable and more uncertain economic outlook, worsening of industry-specific problems, and lower risk tolerance.
Suggested citation: "Commercial Banks," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-06, pp. 16-17, 06.01.2001.