2) The easing in
credit standards need not lead to higher loan losses, however, because the acceptance of loan applicants of below-average creditworthiness may be offset by the increase in each borrower's chance of repaying his loan due to the productivity shock.
Finally, I shall discuss the steps taken by the Federal Reserve throughout the past year to caution its examiners, state member banks, and bank holding companies about the risks inherent in weakening
credit standards and to ensure that financial institutions are taking appropriate action to address emerging problems in consumer loan portfolios.
The two executives focused on a few key business lines, kept costs under tight control, and maintained high
credit standards.
It was also an important cause of the collapse in
credit standards that helped precipitate the wild financial gyrations of the 1980s decade.
For protection against these dual challenges, landlords have been turning to stricter tenant
credit standards or to some form of credit enhancement, such as letters of credit.
The perception of greater risk from recession and falling profits continues to reinforce the stiffening of
credit standards we first began to see last summer.
Athens:
Credit standards and the terms and conditions for loans to non-financial corporations (NFCs) remained unchanged.
Several banks are stepping on the accelerator by easing
credit standards and granting loans to more vulnerable customers.
Cypriot banks, plagued by their non-performing loans stock of roughly half their portfolio, kept their
credit standards unchanged in the second quarter and are expected to do so in the current quarter, the central bank said.
Results from the June quarter survey suggested that most of the survey respondents reported no change in
credit standards for both business and personal loans.
A survey by the central bank also showed that banks are increasingly competing for customers by easing
credit standards.
