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Eurozone Credit Standards for Businesses Broadly Stable in 1Q; Tougher for Housing Loans

Eurozone banks kept their internal approval criteria for loans to businesses broadly unchanged in the first quarter, but tightened standards for housing loans and consumer credit, the European Central Bank said Tuesday.

For businesses, the outcome “somewhat more favorable” than expected, the ECB said its April bank-lending survey, as banks had forecast a slight tightening of standards in the previous poll.

While conditions for business loans eased in France and the Netherlands, they tightened in Germany. Banks in Italy, meanwhile, left their approval criteria for business loans unchanged in the first quarter, after a sharp tightening of standards in the fourth quarter.

Looking ahead, the 144 banks that participated in the ECB survey expect “an easing of credit standards” for both business loans and consumer credit in the second quarter, whereas conditions for housing loans are forecast to tighten further.

The eurozone economy is heavily dependent on the availability of funding, and economists monitor bank-lending data to assess trends in corporate investments and the housing market, among other things.
Source: Dow Jones

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