Bank Cuts Prime Rate to 8.5%

Southwest Bank of St. Louis, a regional bank that sometimes serves as a trend setter on interest rates, said today it would reduce its prime lending rate to 8.5% from 8.75% currently. No major banks immediately followed Southwest’s lead.

Southwest Bank Chairman Emeritus Isaac Long said the most important factor behind the cut was that the lowering of interest rates is a key to preventing a recession in 1988.