US regulator warns on falling lending standards

The Office of the Comptroller of the Currency (OCC), one of the key US bank regulators, has warned that underwriting standards are slipping as competition intensifies. In its semi-annual report, the OCC singled out syndicated leveraged loans and indirect auto lending as two areas of concern. The regulator flagged up signs of increased credit risk, including “increasing collateral advance rates, waiving or loosening of guarantees, and more liberal repayment terms such as extended periods of interest-only payments.”