By Euro zone banks tighten credit by most since debt crisis, ECB says By Reuters
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© Reuters. FILE PHOTO: Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. REUTERS/Wolfgang Rattay
FRANKFURT (Reuters) – Euro zone banks have tightened access to credit for companies by the most since the 2011 debt crisis and expect to continue doing so as they turn more pessimistic on the economy amid rising funding costs, a European Central Bank survey showed on Tuesday.
But demand for loans from enterprises and household also fell, with the drop in demand for mortgages the biggest on record on the back of higher interest rates and lower confidence, the ECB’s quarterly Bank Lending Survey showed.
The results of the BLS may play into the hands of ECB policymakers making the case for smaller rate hikes in the coming months at a policy meeting on Thursday.
A net 26 percent of banks polled by the ECB said they made their standards for approving loans to companies stricter in the last quarter of last year, the biggest tightening since 2011.
Credit standards were also tightened for consumer credit and mortgages – a trend that banks expect to continue this quarter.
Euro zone banks tighten credit by most since debt crisis, ECB says
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