U.S. Fed survey shows credit conditions improving

08:18, July 14, 2010      

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U.S. investors are demanding more securities, an encouraging sign that credit conditions are improving, reported the Federal Reserve on Tuesday.

According to a new survey by the central bank, demand has increased over the March to May period for funding high-grade corporate bonds, stocks, residential mortgage-backed securities issued by mortgage giants Fannie Mae and Freddie Mac and other asset-backed securities.

The quarterly survey was conducted during the period from May 24, 2010, to June 4, 2010.

During the height of 2008 financial crisis, panicked investors trimmed sharply their lendings against a variety of securities. That cut off the flow of credit to businesses and consumers and plunged the country into the worst recession since the 1930s.

The new survey found that big securities dealers had "generally loosened" credit terms to important customers, such as hedge funds, private equity firms, insurance companies and other big institutional investors.

However, credit to small and medium-sized businesses remain tight, the Fed Chairman Ben Bernanke said Monday. He called for banks to lend more in order to boost recovery and create jobs.



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