WASHINGTON — A Federal Reserve survey finds that more than half of U.S. banks that lend to European banks continue to tighten their credit standards. That reflects the U.S. banks’ concern over the deepening European debt crisis.
Of the 22 U.S. banks surveyed that make loans to European banks, one said it had tightened its standards “considerably” for such loans in the second quarter. Another 13 banks, or 59 percent, said they had pulled in the lending reins “somewhat” during the April-June period, according to the survey released Monday.
The debt crisis gripping the 17 countries that use the euro has pushed much of the region into a recession. Many European banks are heavily exposed to government debt, making them a greater risk.
U.S. banks generally eased standards for loans to businesses.