Fed survey shows that banks relaxed the loan standards for businesses and households in the second quarter By Reuters

WASHINGTON (Reuters)-Bank of America’s loan officer reported that as the economy recovers supported by wider reopening and rising coronavirus vaccination rates, the standards and terms of commercial loans have been relaxed in the second quarter.

Officials also stated in the Federal Reserve survey released on Monday that the demand for commercial loans by companies of all sizes has increased.

The Fed stated in the quarterly survey: “The main net stocks of banks… will make the economic outlook more favorable or less uncertain, the competition from other banks to non-bank lending institutions more intense, and the improvement of industry-specific issues are important reasons.”.

Data from the US Department of Commerce last Thursday showed that the annualized growth rate of the US economy in the second quarter was 6.5%, pushing GDP above its pre-pandemic peak.

For consumers, the bank report relaxed the standards for all three types of loans—credit card loans, auto loans, and other consumer loans—and demand for them became stronger during the same period.

The Federal Reserve surveyed loan officers at 75 domestic banks and 22 US branches and foreign banking institutions.