Recently, the Federal Reserve released the Senior Loan Officer Survey on Bank Lending Practices, and there are some encouraging signs. After widespread tightening of lending standards throughout most of the year, bank lending eased back toward more of a neutral position. A small net fraction of survey respondents (5.5%) reported that they continued to tighten standards in the fourth quarter; similarly, a small net fraction (11%) of respondents reported that demand for C&I loans from large and middle market firms had weakened further. While both of these figures remain on the wrong side of the ledger to spur loan growth, they both represent significant improvement from the state of affairs just six months ago.
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