U.S. banks eased lending standards for business loans in third quarter: Fed

A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

WASHINGTON (Reuters) - Loan officers at U.S. banks reported easing standards for business loans while terms for commercial real estate loans remained unchanged, a Federal Reserve quarterly survey showed on Monday.

The officers also said they had seen a weakening in demand for both types of loans in the third quarter.

“On balance, modest net percentages of banks reported that they eased standards for (business) loans to firms of all sizes over the past three months,” the U.S. central bank said in its survey.

The Fed has raised interest rates twice this year and appears on course to do so again at its next policy meeting in December.

U.S. financial conditions remain loose, strengthening the argument that another rate rise would not slow the economy’s brisk growth.

Banks also reported tightening standards and terms on credit and auto loans while demand for them remained unchanged.

The Fed surveyed loan officers at 72 domestic banks and 23 U.S. branches and agencies of foreign banks.

Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci