PANEL TO QUIZ FED CHIEF ON SQUEEZE

PANEL TO QUIZ FED CHIEF ON SQUEEZE

The Senate Banking Committee intends to question Federal Reserve Chairman Alan Greenspan and other U.S. banking regulators about reports of a "credit crunch" for businesses, Committee Chairman Donald Riegle, said Tuesday.

Sen. Riegle, D-Mich., said the committee plans to hold a hearing in which Mr. Greenspan and other banking regulators will be asked to testify on the situation. A Fed spokesman said Mr. Greenspan is slated to testify on the subject June 7.The National Association of Home Builders has been the most vocal group in complaining about a "credit crunch" as a result of a federal crackdown on bank lending practices. Borrowing also has become more difficult for some manufacturers, said National Association of Manufacturers President Jerry Jasinowski.

Federal regulators have responded by saying they are urging banks to show caution in making loans, but they have denied they want banks to stop real estate lending. The regulators earlier this month urged banking industry leaders to continue lending to qualified borrowers. During a hearing Tuesday on federal deposit insurance, Sen. Riegle and other members of the Senate panel expressed concern about reports that businesses were facing increased difficulty obtaining credit. Sen. Riegle said he was receiving "a lot of calls" about the subject.

Sen. Jake Garn of Utah, the panel's senior Republican, said the accounts of a credit squeeze were "too widespread" to be solely an occasional problem.

A Fed survey of bank lending practices released last week showed that business loans not related to mergers has slowed since 1989, mainly because of weaker demand, but also because of tighter lending policies.