Frankfurt: The eurozone economy enjoyed easier access to credit in the first quarter, a European Central Bank survey showed Tuesday, as banks eased their conditions for lending to firms and households.
Credit standards -- the criteria banks use to determine whether to lend to a person or company -- were "considerably" looser in the first quarter both for households looking for a mortgage and for firms, lenders told the ECB, with a smaller easing in loans for consumer spending.
Meanwhile terms and conditions on the repayment of loans once they were granted eased across all three categories, the banks said.
Lenders reported a continuing increase in demand from borrowers over the first quarter, the ECB found.
Companies sought cash at low interest rates mainly for investments and mergers and acquisitions, while homebuyers -- also attracted by low rates -- were increasingly confident in the economic outlook and hoping to profit from rising housing markets.
The ECB has set interest rates at historic lows and pumped almost 2.4 trillion euros ($2.9 trillion) into the eurozone economy through its "quantitative easing" (QE) or bond-buying programme.
Its aim is to pump cash through the financial system and into the hands of companies and consumers, powering growth and stoking inflation towards its goal of just below 2.0 percent.
Banks told the ECB that the QE scheme and low interest rates had encouraged the easing of terms and conditions for repayment of loans and influenced them to loan out more cash.
Governors are expected to leave both policies unchanged at a meeting Thursday, hoping they will help insulate the single currency area from looming economic headwinds like protectionist threats and risks of conflict.
The April survey was carried out between March 15 and April 3, with 149 banks responding.
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