Eurozone credit conditions easing slightly: ECB survey
Only a few eurozone banks expect to tighten their lending rules in the coming months as their own access to funding continues to improve, the European Central Bank said on Wednesday.
In its latest quarterly Bank Lending Survey, which quizzed a sample of 135 banks in the euro area, the ECB said a net 7.0 percent of respondents had said they expected to tighten the criteria that businesses must meet to take out loans in the second quarter of the year.
That is same the proportion of banks that tightened their credit standards in the first quarter. But it represents a decrease from the final quarter of 2012 when the proportion had stood at 13 percent, the survey showed.
The decline in the net tightening of credit standards in the first quarter "reflected somewhat reduced contributions from banks' risk perceptions as well as from cost of funds and balance sheet constraints," the ECB wrote.
"This notwithstanding, borrowers' risk and macroeconomic uncertainty remain the main concerns of euro area banks in setting their lending policies," it cautioned.
At the same time, the survey found that banks' access to retail and wholesale funding had improved in the first quarter of 2013, not least due to a "significant" abatement of the fallout from the eurozone's sovereign debt crisis, the ECB said.
In the second quarter, however, banks expected "only marginal improvements in funding conditions."
On the demand side, overall demand for loans remained weak, the survey said.
"Euro area banks reported a broadly unchanged net decline in demand for loans to enterprises in the first quarter of 2013," while there was a "substantial acceleration in the fall of demand" for housing loans and consumer credit.
This meant "that the net fall in demand is now back to negative levels similar to those reported in previous quarters in 2012," the ECB complained.
Nevertheless, "looking ahead, for the second quarter of 2013 banks expect a less negative decline in demand for all categories of loans," it added.
© 2013 AFP