The demand for credit from companies sank at the fastest rate since the 2008 crisis and that of mortgages remains close to historical lows
MADRID, 2 May. (EUROPA PRESS) -
Banks in the euro zone reported a substantial tightening of their lending conditions in the first quarter of 2023, which exceeded the expectations of the entities themselves, as a result of the greater perception of risk in a context marked by increases in interest rates. interest and turbulence in the sector after the collapse of several banks in the United States and the rescue of Credit Suisse, according to the latest edition of the survey of bank loans from the European Central Bank (ECB).
"The tightening of loans to companies and for the purchase of housing was stronger than expected by the banks in the previous quarter and points to a persistent weakening of the credit dynamics", highlights the ECB, which has been warning in recent weeks of the relevance of information on bank loans for their decisions on monetary policy.
In this sense, in mid-April, the chief economist of the ECB, the Irishman Philip Lane, already warned of the relevance of the information provided by the survey of bank loans because it would reveal the first effects of the financial turmoil in March on activity credit in the eurozone.
Specifically, euro zone entities indicated an even greater tightening of their lending conditions to companies, with a net percentage of 27% of banks reporting greater restrictions, the fastest pace since the zone's sovereign debt crisis. euro in 2011.
Likewise, from the demand side, banks confirmed a strong net decrease in the demand for loans or drawdown of credit lines by companies in the first quarter of 2023.
In fact, this fall in net demand was stronger than expected by the banks in the previous quarter and "is the strongest since the global financial crisis," warns the ECB, noting that the entities reported that the main driver of this fall was the level of interest rates in an environment of tightening of monetary policy.
In terms of lending to households for house purchase, eurozone banks also reported a further substantial net tightening of their mortgage credit criteria, while net tightening was less pronounced for consumer credit. and other loans to households.
On the other hand, the net decrease in the demand for housing loans remained close to the historical fall reported in the previous quarter, while there was a smaller net decrease in the demand for consumer credit and the rest of loans to households.
In this sense, the ECB reflects that the increase in interest rates, the weakening of the outlook for the housing market, low consumer confidence and the decrease in spending on durable consumer goods contributed negatively to the demand for
Looking ahead to the second quarter, the banks surveyed informed the ECB that they expect to undertake a further, albeit more moderate, tightening of their credit standards for lending to companies and for home purchases.
In the case of consumer credit, banks in the euro area anticipate a further net tightening of lending conditions at a rate similar to that of the first quarter of 2023.
From the demand side and with a view to the second quarter of the year, banks expect an additional net drop in credit requests from companies, although to a lesser extent than that observed between January and March.
Banks also expect a further sharp net decline in demand for home loans and a somewhat smaller net decline in demand for consumer credit than in the first quarter.