Eurozone banking entities have tightened the conditions for accessing credit for companies and households during the fourth quarter of 2023 and will continue to do so in the first months of 2024, due to the greater perception of risk due to the economic outlook.
According to the bank loan survey published yesterday by European Central Bank (ECB), 4% of eurozone banks raised the conditions for companies to access credit. This represents a moderate tightening compared to the previous quarter (12%), but is added to the substantial increase in demands accumulated since 2022, which has contributed, together with weak demand, to the fall in growth of this type of loans.
In addition, Banks tightened the criteria for granting loans to households, although they did so to a lesser extent for mortgages. and more pronounced in the case of consumer loans. Specifically, 2% of banks increased the requirements to access mortgages during the last quarter of 2023 (11% between July and September) and 11% tightened consumer credit (16% in the previous quarter).
In the case of Spain, consumer credit conditions tightened, although less than in the previous quarterwhile the credit requirements for companies and for mortgages did not change.
In parallel, the Demand for loans or credit by businesses and consumers also decreased during the fourth quarter of 2023, although less than in the previous period, mainly due to high interest rates.
More demand
Eurozone banks are confident that the contraction in credit demand following the tightening of the European Central Bank’s monetary policy has bottomed out and that In the first quarter of 2024, there will be an increase in loan applications from companies, as well as mortgages by consumers, something that has not happened since the beginning of 2022.
“For the first time since early 2022, banks expect a small net increase in loan demand.” to companies and housing loans in the first quarter of 2024”, highlights the ECB in the bank loan survey carried out between December 8, 2023 and January 2, 2024 and in which 157 banks participated.
2024-01-24 02:58:45
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