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Banks improve credit outlook

Feb 04, 2011 Brian Bradley

The Federal Reserve's Senior Loan Officer survey has revealed that lenders have a more positive view of where the credit market is going, according to MarketWatch. The results also showed better conditions among delinquencies and charge-offs, based off the belief that the improving U.S. economy will remain in line with widely held forecasts. That could be good news for both the lending market and small businesses. The number of owners who may have seen improvements in their credit reports and lending abilities over the last 12 months has Capital Economics chief economist Paul Ashworth cautiously optimistic about such a development. "We could see a marked turnaround in business lending this year, which would presumably boost investment and possibly even employment too," Ashworth said in an email to clients, MarketWatch reports. The survey from the Federal Reserve found that 50 percent of the 57 domestic banks and 22 branches of foreign banks predict improvements in commercial real estate loans. Additionally, 70 percent forecast gains in the quality of loans to small firms - companies that generate fewer than $50 million.