Eurozone Banks Tighten Credit Standards In Q4: ECB Survey

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Eurozone banks tightened lending conditions across all loan categories in the fourth quarter, the January Bank Lending Survey from the European Central Bank showed Tuesday.

The banks credit standards for loans to enterprises, loans to households for house purchases and consumer credit were tightened in the fourth quarter.

The lenders cited the deterioration of the general economic outlook, increased credit risk of borrowers as well as a lower risk tolerance as relevant factors for the tightening.

In the first quarter of 2021, banks expect credit standards to continue to tighten for loans to firms and households.

The survey showed that firms’ demand for loans declined further in the fourth quarter, while demand for housing loans continued to increase reflecting a catching-up in demand after the first lockdown period in the second quarter.

For consumer credit and other lending to households, a net percentage of banks reported a decline in demand in the fourth quarter.

Lenders noted that coronavirus-related government guarantees supported credit standards and helped keep terms and conditions for loans to firms more favorable in 2020.

The material has been provided by InstaForex Company – www.instaforex.com

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