The recent banking sector turmoil has caused lenders to tighten borrowing standards, squeezing the supply of credit to households and businesses, potentially threatening economic growth, according to a report from the Federal Reserve.
The Fed’s quarterly Senior Loan Officer Opinion (SLOOS) survey, released Monday, showed that U.S. credit conditions continued tightening in the first months of the year.
The report showed that a net 46 percent of banks tightened credit terms for a key category of business loans for medium and large businesses. That’s a relatively modest increase compared to 44.8 percent during the final quarter of 2022.
Credit conditions for small firms stiffened more substantially, however, with a net 46.7 percent of bank reporting more stringent lending terms compared to 43.8 percent in the earlier survey….