Eurozone banks cut lending more than expected after borrowing costs rose and turmoil gripped the financial sector, increasing calls for the European Central Bank to slow the pace of interest rate hikes, Bloomberg reports.
Lending “further tightened substantially” in the first quarter, according to the ECB’s Bank Credit Survey, published on Tuesday. “The tightening of lending to companies and for the purchase of housing was stronger than banks expected in the previous quarter and indicates a persistent weakening of the dynamics.”
The decrease in net demand from companies was much larger than that predicted by banks and the largest since the global financial crisis, the report states.
At the same time, the figures indicated that M3, a broad indicator of the amount of money circulating in the economy, fell in March to its lowest level since October 2014.
2023-05-02 14:21:19
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