Fed reports tighter bank lending standards

WASHINGTON - 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.

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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.

The current credit crisis began last year with rising defaults in the market for subprime loans, loans extended to borrowers with weak credit histories.

Many of those subprime loans were packaged into mortgage-backed securities and sold to investors around the world.

Those investors, however, have pulled back from the subprime market and from other types of credit as losses have soared with the rising mortgage defaults.