17.8 C
New York
Friday, June 2, 2023

Euro zone banks see rising loan demand, easing credit standards: ECB

Euro zone banks see rising loan demand, easing credit standards: ECB© Reuters. European Central Bank (ECB) headquarters building is seen in Frankfurt

FRANKFURT (Reuters) – Euro zone banks expect demand for corporate and household loans to increase further in the third quarter with credit standards also easing, the European Central Bank said in a quarterly survey of the bloc’s top banks.

Buying 2.5 trillion euros worth of public and private bonds over the past three years, the ECB has pushed borrowing costs to record low levels, hoping to stimulate borrowing and spending, all with the ultimate aim of boosting inflation.

Although the scheme worked more slowly than expected, household and corporate lending are both near post-crisis highs, so the ECB agreed last month to wind down the bond purchases, satisfied that inflation is finally moving back towards its target of just under 2 percent.

In the second quarter, banks saw increased demand for corporate, housing and consumer loans and said credit standards — internal guidelines or loan approval criteria — also eased for all three categories, the ECB said.

Its comments were based on a survey of 149 lenders.

“Banks’ overall terms and conditions on new loans continued to ease across all loan categories in the second quarter of 2018, driven mainly by a narrowing of margins on average loans,” the ECB said.

It added that competitive pressures and risk perceptions contributed to an easing of credit standards in the second quarter, while banks’ risk tolerance, their cost of funding and balance sheet constraints had a broadly neutral impact.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles