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Weaker banks faced with higher borrowing costs are cutting back on loans and assets.
As with other banks, Santander has also been selling assets and cutting back on loans in order to preserve capital.
And some major banks that lend to condo developers are cutting back on loans for proposed projects or for land that developers want to buy.
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The bank is cutting back on issuing home loans it cannot sell to government agencies like Fannie Mae and Freddie Mac.
Austrian and German banks are already cutting back on their Swiss-franc linked loans for Latvian and Hungarian consumers, which went sour as those countries' currencies tumbled.
Other figures show people are taking desperate measures like taking out payday loans or cutting back on heating and food for the family.
NEW YORK TIMES An Optimistic Sign in Bank Profits | The Wall Street Journal reports: "For the first time in three years, banks are getting a larger boost to their profit from traditional sources of revenue than from simply cutting back on funds set aside for bad loans".
During this period, her clients got by, she said, by going into debt with loan sharks, cutting back on living essentials, and accepting charity food parcels.
Lenders are struggling to minimize risk, and because they are especially at risk to lose money on residential real estate loans, they are cutting back on homeowners' credit lines or freezing them altogether.
Or it could have been hedge funds cutting back on highly leveraged positions and buying yen to repay loans.
To make up for consumer losses, banks have been cutting back on what was once a free-flow of credit, particularly by reining in the number of new loans issued and by sharply tightening lending standards.
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