In its latest quarterly senior loan officers survey, the Federal Reserve reported that banks in record numbers are holding borrowers to much stricter standards because of the slowing economy.

“In the current survey, large net fractions of domestic institutions reported having continued to tighten their lending standards and terms on all major loan categories over the previous three months,” the Fed said Monday.

The survey, which included 55 domestic and 21 foreign  banks, found that:

• 85 percent of banks had tightened credit standards for commercial and industrial loans made to large or mid-size companies. Only 60 percent had done so during the previous quarter.
• 87 percent of surveyed banks reported requiring stricter requirements for commercial real estate mortgages. At the same time, 77 percent of banks reported the demand for these loans had dramatically decreased.
• 71 percent of banks had tightened their lending standards on residential prime loans, and 89 percent of banks made it more difficult to qualify for “nontraditional” home loans. Few respondents of the survey were still offering subprime loans, but those that did had all continued to require more of their poor credit applicants.
• 78 percent of banks restricted approval for home equity lines of credit and 59 percent upped their standards for approving new credit card requests.
• 20 percent of respondents reduced lines of credit for prime borrowers while 60 percent reduced them for their less credit worthy customers.

The dramatic choke hold on commercial and residential financing is due in large part to losses and fears that banks have experienced as the global economy has withered during in the past two years.

“Roughly 75 percent of foreign respondents and about 40 percent of domestic respondents noted that a deterioration in their bank’s current or expected capital position had contributed to the move toward more stringent lending policies over the past three months,” the Fed concluded.

It added, “ Almost all domestic and foreign respondents pointed to a less favorable or more uncertain economic outlook as a reason for tightening their lending standards.”