Wall Street Journal (02/04/08) P. C1; Patterson, Scott
Smaller banks look to be falling prey to the same wave of risk aversion that is tightening credit nationwide--a trend that is only being made worse by skittish regulators concerned about lax lending standards. The Federal Reserve's October survey of senior loan officers showed that a majority from around the country were tightening standards on everything from mortgages to commercial real estate to consumer loans; the next edition of this survey is due out soon. One of the main areas of concern is commercial real estate, as the Office of the Comptroller of the Currency recently reported that the ratio of commercial property loans to capital at the country's community banks has almost doubled to 285 percent in the past six years. OCC spokesman Bob Garsson remarks, "We've been picking up evidence that there are higher levels of nonperforming loans [in commercial real estate]."
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