The Fed’s latest Senior Loan Officer Opinion Survey shows that, even though the banking crisis has faded, credit conditions remain unusually tight. Although the net percentage of banks tightening lending standards on commercial real estate loans fell back very slightly, the percentage tightening standards on business C&I loans hit a new cyclical high. Despite the optimism surrounding the real economy’s performance over the first half of this year, credit conditions have historically only ever been this tight during, or in the run up to, recessions.
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