WASHINGTON — Some banks have recently reported easing their lending standards or terms as a result of more aggressive competition from other banks or nonbank lenders.

That's according to the July 2007 Senior Loan Officer Opinion Survey on Bank Lending Practices from the Federal Reserve Board, which collected data from the 53 banks that account for 67% of all commercial and industrial loans as of March 31. Institutions that moved to a more stringent lending posture said they did so because of a "less favorable" or "more uncertain" economic outlook, a reduced tolerance for risk and decreased liquidity in the secondary market for C&I loans.

Roughly one-fifth of those surveyed said they had experienced weaker demand for C&I loans over the past three months from large and middle-market businesses for reasons ranging from borrowers' decreased need to finance inventories or investment in plant or equipment, or a shifting towards other bank or nonbank credit sources, the survey's data found.

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