Credit to remain tight, U.S. bankers say

In its July survey of loan officers released Monday, the Federal Reserve found that 30 percent of 55 domestic banks toughened criteria for obtaining commercial and industrial loans, compared with 40 percent in April and a peak of about 85 percent in November. The steadily improving credit conditions come as the American economy shows signs of emerging from the deep recession.

But most loan officers also said they didn't expect their banks' lending standards to return to normal until the second half of 2010, at the earliest. That could prove to be an obstacle to a recovery if a lack of credit further constrains businesses from investing and households from spending.

Disappointing reports on retail sales and consumer confidence last week have heightened worries on Wall Street and among economists of a “consumerless” recovery. Consumer spending accounts for about 70 percent of U.S. economic activity.

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