US investment banks have moved to tighten their lending criteria following the sub-prime mortgage crisis, it has been revealed.
A survey from the Federal Reserve showed that 49.1 per cent of banks had tightened their standards to some degree on prime residential mortgages during the last three months, with just under four per cent saying they has tightened them more rigorously.
Meanwhile, in the sub-prime sector, 28.6 per cent said they had slightly tightened standards, compared with 42.9 per cent who said they had considerably tightened their criteria.
Businesses are also affected by the more stringent lending conditions with 30.4 per cent of banks saying they had somewhat tightened on commercial and industrial loans, the National Post reports.
The report said: "A large number of domestic and foreign respondents pointed to a less favourable economic outlook and to a worsening of the conditions of, or the outlook for, commercial real estate in the markets where their banks operate as reasons for tightening terms on commercial real estate loans in 2007."
