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MNI BRIEF: EZ Bank Credit Standards Tighten In Q4 - ECB Survey

(MNI) London

Banks across the eurozone tightened credit standards further for loans or credit lines to enterprises in Q4 2023, the ECB's latest Bank Lending Survey showed. The BLS is closely watched by policymakers on the ECB's Governing Council and will in part guide the thinking behind the timing of the first cycle rate cut.(See MNI SOURCES: "Biggest Minority" Favours ECB June Cut)

The tightening of conditions added to the "substantial cumulative tightening since 2022", the survey noted, which, together with weak demand, has contributed to the strong fall in loan growth to firms.

Banks also reported a further net tightening of credit standards for loans to households, which while small for housing loans was more pronounced for consumer credit. Risk perceptions were a major driver of the tightening of credit standards in both categories, with banks’ lower risk tolerance also driving the tightening of credit standards for consumer credit.

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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