By Paul Kiernan 

WASHINGTON -- Banks in the U.S. tended to ease lending standards to businesses in the third quarter as demand for loans weakened, though most reported little change, the Federal Reserve said Tuesday.

A Fed survey of senior loan officers found that more banks eased standards on commercial and industrial lending than tightened them in the third quarter, particularly in the case of large firms with more than $50 million in annual revenue.

Banks tended to increase the maximum size of credit lines to large firms, reduce the cost of such credit lines, offer lower interest rates relative to the banks' borrowing costs and require less onerous loan covenants, among other things.

Asked why they eased lending standards, many loan officers cited more aggressive competition from other financial firms, and some noted an increased tolerance for risk. At the same time, more loan officers said demand for commercial and industrial loans had weakened than vice versa.

Senior loan officers at 70 domestic and 22 foreign-owned banks participated in the survey, which was conducted in early October.

Write to Paul Kiernan at Paul.Kiernan@wsj.com

(END) Dow Jones Newswires

November 13, 2018 14:18 ET (19:18 GMT)