U.S. regulators will probably enforce higher underwriting standards for leveraged loans as they undertake an annual review, according to Moody's Investors Service.
The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency may impose stricter discipline in the Shared National Credit review of syndicated loans, the results of which will be out "shortly," Moody's said in a statement.
This "would be credit positive as more aggressive underwriting in this sector has increasingly threatened to undermine the balance sheet repair that U.S. banks have undertaken," according to a report dated today.
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