U.S. Banks Transfer Bad Loan Risk to Blackstone, DE Shaw Group Amid Tightening Regulations and Rising Rates, Small Business Loan Demand Weakens, US Regulators Rein in Federal Home Loan Banks

U.S. banks are transferring the risk of bad loans to investment firms like Blackstone and DE Shaw Group to adapt to tighter regulations and rising rates. Tight bank lending standards suggest high recession odds. Small business loan demand weakens as credit availability becomes a primary concern for the US economy. US regulators' push to rein in the Federal Home Loan Banks may increase costs to banks and affect the nation's funding markets.