The Fed’s senior loan officer survey found that banks are tightening lending standards and terms across all sectors.
30% tighten standards in July compared with 40% in April for commercial loans. Standards are tighter on all types of loans except for prime residential mortgages.
It is not hard to see why the Fed extended the term of the TALF program earlier today, as it is designed to re-start securitization markets which should improve lending.
Markets remain moribund after repricing earlier today. The EUR/USD is at 1.4085 while USD/JPY is at 94.31.
