Fed says banks are tightening credit

The following appeared on page 2C of the Tuesday May 6, 2008 issue of the St. Paul Pioneer Press.

The Federal Reserve reported Monday that more banks are tightening lending standards on home mortgages, other types of consumer loans and business loans in response to a spreading credit crisis. The Fed said the percentage of banks reporting tighter lending standards was near historic highs for nearly all loan categories.

The survey, conducted in April, found that nearly two-thirds of banks surveyed had tightened lending standards on traditional home mortgages with 15 percent saying those standards had been tightened considerably. But the survey found that the tougher lending standards extend far beyond home mortgages to other types of consumer debt such as credit cards and home equity lines of credit.

[My comments: Considering the last post, why doesn't the Fed just open up it's discount window to consumers and help the mortgage industry out. Why does CONGRESS have to do everything. Oh wait, they don't want to take the risk that other banks have. Yes, let the taxpayer bail everyone out so we don't have to seems to be the prevailing wisdom on Wall Street and in Washington. Shame! Shame!]