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MNI BRIEF: German Banks Pulling Back On Corporate Lending: Ifo

(MNI) London

Germany's corporates are finding it more difficult to obtain financing, a suvery for the Ifo Institute shows, suggesting there could be a more negative Eurozone-wide picture painted in the ECB Bank Lending Survey due for publication on Tuesday. “Banks are gradually increasing interest rates on loans and are more reluctant to grant them,” Klaus Wohlrabe, Head of Surveys at ifo said.

The latest Ifo survey showed almost 30% of companies across Germany in ongoing credit negotiations reported restraint on the part of banks, up from 21% in the June survey. The rise in the Ifo Credit Constraint Indicator was mainly attributable to service providers -- up almost 10 percentage points), as the togh economic conditions ripple out from the manufacturing sector.

The ECB's survey will be released at 9am BST Tuesday, the last piece of closely-watched hard data for policymakers ahead of their rate decision. An easing of the recent slide in lending conditions could have given the hawks a platform to push for tighter policy, but if the German scenario is repeated across the block a further tightening of conditions appears likely. (MNI SOURCES: ECB Doves Wary Of December Push For Hike)

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

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