Banks continue to ease their standards for business loans, aswell as the terms on those loans, according to the latest quarterlysurvey of bank loan officers released today by the Federal ReserveBoard. The banks surveyed also cited increased loan demand frombusinesses of all sizes, according to the Fed.

Fifteen percent of the 55 U.S. banks surveyed loosened theirstandards for commercial and industrial loans in the first quarter,according to the survey, as did 20% of the 20 foreign banks in thesurvey. Meanwhile, 55% of domestic banks say they lowered thespread they charge over their cost of funds to large and midsizebusiness borrowers, and 50% lowered the spread they charge smallbusiness borrowers. Among foreign banks, 50% cut the spread theycharge on loans.

About 25% of the domestic banks say they saw increased demandfor loans from large and midsize companies, while just 10% cited apick-up in loan demand from small businesses.

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