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Credit terms ease in last 3 months: Fed survey

WASHINGTON (Reuters) - U.S. dealers eased credit terms for hedge funds, insurance companies and other firms in the three months to September, a Federal Reserve survey showed on Thursday.

This was the second installment of the Fed's Senior Credit Officer Opinion Survey, which polls dealers at 20 financial institutions. Its first was released in July.

The latest survey showed borrowers drove a hard bargain on credit terms. The Fed said a "modest net fraction" of dealers expected credit terms for hedge funds, insurance companies and others to ease further over the coming three months.

The Fed said only a few respondents said they increased the amount of resources and attention devoted to managing concentrated credit exposures, a notable contrast to the June survey which showed more than half of respondents had done so.

The September survey included a special question on dealers' assessment of how willing their clients were to take on risk.

Overall, the responses were mixed. However, the Fed said a smaller subset of only the largest firms found a majority reported a decrease in client risk appetite since the start of the year and over the past three months.

The Fed also conducts a senior loan officer survey, which tracks lending to more traditional borrowers such as businesses and consumers.

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