Credit tightening ...loosening? Demand down?

I am not one to dwell in doom-and-gloom land. That said, understanding the overall situation in business banking helps put the situation at your own financial institution into perspective. Besides, your business borrowers expect you to be up on the latest.

So what do I mean by credit tightening loosening? It looks like even though banks are continuing to tighten credit, the % of banks doing so is dropping according to the April Senior Loan Officer Opinion Survey from the Federal Reserve Board.

Overall outlook for loan quality:

In response to the special questions on the outlook for loan quality, a significant majority of banks reported that credit quality for all types of loans is likely to deteriorate over the year if the economy progresses according to consensus forecasts.

Commercial and Industrial Loans

40% of respondents tightened credit their credit standards further over the January report. Strangely, that is an improvement since 65% reported tightened credit standards in January compared to the previous October.

Large majorities of both domestic and foreign banks reported a less favorable or more uncertain economic outlook, a worsening of industry-specific problems, and a reduced tolerance for risk as important reasons for tightening credit standards and terms on C&I loans.

On balance, about 60 percent of domestic banks reported a further weakening of demand for C&I loans from firms of all sizes over the previous three months, a proportion similar to that reported in the January survey.

Your neck of the woods:

Of course, what is happening nationally is not always what is happening locally. Your local and regional economy, the concentration of industries at your company, and your financial institution's capital situation have a lot to do with how lending at your company is going.

Are you finding the ability to get loans through easing a bit, still about the same or continuing to tighten?