MADRID, 25 Oct. (EUROPA PRESS) -
The banks of the euro zone tightened their credit standards in the third quarter for their loans or lines of credit to companies and undertook "a strong tightening" for the granting of mortgages, while, facing the fourth quarter, the entities will continue to tighten its conditions for companies and homes.
According to the survey of bank loans, carried out by the European Central Bank (ECB) between September 16 and October 4 with the participation of 153 banks, the internal guidelines or the approval criteria of banks for loans or lines of credit Businesses tightened "further" in the third quarter of 2022.
Eurozone banks attributed their response to the impact of the current slowdown in the economy and intensifying fears of recession, as well as risks related to the economic outlook, sector or company specific situations and decreased tolerance to the risk of the banks.
Likewise, the ongoing normalization of monetary policy, the cost of bank funds and the balance sheet situation also had a restrictive effect on the credit standards applied by banks in their loans to companies.
On their side, the banks reported an increase in the demand for loans from companies in the third quarter of 2022, driven by the financing needs for working capital and inventories, in a context of inflated production costs, growing inventories due to the slowdown in demand and precautionary behavior in a context of 'bottlenecks' in supply.
For the second consecutive quarter, fixed investment had a moderate impact on the net loan demand of companies, in line with the expected slowdown in investment, while banks have started to signal a negative contribution from the general level of interest rates. interest on credit demand.
As for loans to households for house purchase, euro area banks reported "a strong net tightening of credit standards" and a smaller but still pronounced net tightening of consumer credit and other loans.
In the third quarter, the net demand for loans for house purchase fell substantially, while the demand for consumer credit and other loans to households also fell in net terms.
This net decrease in household loan demand was mainly driven by the general level of interest rates and the drop in consumer confidence.
For the fourth quarter of 2022, banks expect a "significantly larger" net tightening of credit standards for business loans and continued tightening of credit standards for both home loans and consumer credit.
On the other hand, banks expect a sharp net decline in demand for housing loans and a smaller but still relatively sharp drop in demand for consumer credit.
