Southwest Bank of St. Louis Lowers Prime Rate to 10.5%

Southwest Bank of St. Louis said today it is lowering its prime lending rate to 10.5% from 11% in a move that apparently reflects new easing by the Federal Reserve to spur the economy.

The St. Louis-based bank often leads other major money center banks in setting the key lending rate, which is the borrowing fee for blue chip customers. Its new rate is to be effective Monday.

None of the major U.S. banks moved immediately to lower their prime lending rates. Spokesmen at the major New York money center banks had no immediate comment.

Southwest led other banks in announcing a prime rate cut to 11% from 11.5% on June 2. The others followed on June 5.

Economists said that the Federal Reserve has eased credit conditions to respond to a weakening economy and that the prime rate decline reflects this easing.