U. S. Federal Reserve said on Monday that most U. S. banks stopped tightening standards on many loan types at the end of last year. The Banks even made it easier for consumers to get some loans, but borrowers did not show any enthusiasm to come to the banks for loans.

Because of this, the credit problems can grow up for the banks in United States, the Fed said in its quarterly survey of Senior Loan Officers. Most banks reported that demand for most types of loans is weakening further.

According to the report, Commercial banks generally ceased tightening standards on many loan types in the fourth quarter of last year but they have yet to unwind the considerable tightening that has occurred over the past two years. The standards for the business loan for the largest companies were given relaxation for the first time since July 2007.

Though the consumer loan demand has weakened, more banks were willing to make consumer instalment loans, for the first time in nearly three years. However, banks were still tightening standards for mortgage loans and for credit card loans to consumers. Even so, some banks tightened standards on credit card loans and many banks reduced credit card limits and were less likely to issue cards to borrowers whose credit quality they doubted, the Fed said.