FRANKFURT: A quarter of eurozone banks will tighten their lending rules in the coming months after already doing so considerably at the end last year, the European Central Bank said on Wednesday.
In its latest quarterly Bank Lending Survey, which quizzed a sample of 124 banks in the euro area, the ECB said a net 25 percent of respondees had said they expected to tighten the criteria that businesses must meet to take out loans in the first quarter of the year.
And 24 percent of euro area banks expected a tightening of credit standards on loans to households for house purchase in the first quarter of 2012, the ECB said.
The survey was conducted between December 19 and January 9 and is unlikely to fully take into account the unprecedented injection of nearly half a trillion euros of liquidity into the banking system by the ECB at the end of last year.
Banks already tightened lending conditions substantially in the final quarter of 2011, the ECB survey revealed.
A net 35 percent of banks did so in the period from October to December, compared with 16 percent in the preceding three months.
"Participating banks explained the surge in the net tightening of credit standards by the adverse combination of a weakening economic outlook and the euro area sovereign debt crisis, which continued to undermine the banking sector's financial position," the ECB said.
Comments
Comments are closed for this article.