Credit Suisse loans under US Fed scrutiny - WSJ

(Reuters) - The U.S. Federal Reserve has asked Credit Suisse Group AG to immediately address problems relating to the bank's underwriting and sale of leveraged loans, or high-interest-rate loans used by private-equity firms to finance deals, the Wall Street Journal reported, citing a source familiar with the matter.

Officials at the Federal Reserve and the Office of the Comptroller of the Currency are using private communications with banks to rein in relaxed underwriting and debt-laden deals and plan to take action on a firm-by-firm basis if required, WSJ reported. (http://on.wsj.com/1m9jAbC)

In a letter to Credit Suisse, known as a Matters Requiring Immediate Attention, found problems with the bank's adherence to guidance issued last year, warning banks to avoid deals that included too much debt or too few protections for the lenders in case of a default, the report said citing the person familiar with the matter.

Credit Suisse and the Federal Reserve could not immediately be reached outside regular business hours.

Reuters reported in January that U.S. prosecutors had initiated an examination of Credit Suisse documents, including internal emails to establish whether a bank committee charged with overseeing the quality of home loans ignored red flags to the detriment of mortgage investors.

(Reporting By Shivam Srivastava in Bangalore; Editing by Gopakumar Warrier)