Fed Survey Reveals Banks Tightening Lending Standards Amid Economic Concerns.

The Federal Reserve's Senior Loan Officer Opinion Survey shows that more banks are tightening their lending standards due to concerns about the credit quality of their loan portfolios, reduction in risk tolerance, and concerns about bank funding costs, liquidity position, and deposit outflows. The report also points to a sharp slowdown in demand for credit, which could lead to a potential credit crunch. The banking turmoil, which began in early March, has added to the stress in the sector, reigniting fears of a credit crunch for U.S. households. Mid-sized banks are struggling, in part, from higher interest rates, which the Fed raised rapidly over the past year from near zero to more than 5%.