More Major Banks in State Reduce Prime Rate to 9.5%

Major California banks continued Thursday to cut their prime rates to 9.5% from 10% following similar moves earlier in the week by most of the nation’s big banks.

Los Angeles-based First Interstate Bank of California and Wells Fargo Bank in San Francisco, the two largest holdouts, trimmed their rates. So did Bank of California and Union Bank, both based in San Francisco.

Bank of America in San Francisco led the way among major banks in the state by announcing its rate cut earlier in the week, followed by Security Pacific National Bank.

The cuts, the first in the prime in a year, bring it to its lowest level since July, 1988. Economists believe, however, that the reductions will generate little borrowing as long as war in the Persian Gulf remains possible.