Lending under pressure: Banks tighten guidelines in the euro zone!

Lending under pressure: Banks tighten guidelines in the euro zone!

Eurozone, Europa - Lending policy in the euro zone will be strictly strict by the end of the second quarter of 2025, as the European Central Bank (ECB) determined in a recent survey among over 150 banks. The survey shows that the banks have to exacerbate their guidelines in response to uncertain economic prospects and increasing credit risks. ots reports that the banks nevertheless an increase in demand for corporate loans after the second quarter 2025 Expect.

The tightened lending guidelines are primarily a reaction to the ongoing economic uncertainties, including inflation and geopolitical tensions that increase the risk of credit. German banking already implemented stricter guidelines in the early 2023, due to similar considerations. The Bundesbank stated that the credit risk has increased in all segments and is not in sight. The Ukraine War and increasing inflation drive concern for economic stability.

effects on lending

The overall increased credit risk is reflected in a noticeable slowdown in growth in lending. According to n-tv Agreement Banks in February 2023 5.7 percent more credit compared to previous year, which is a decline in growth in the growth Compared to 6.1 percent in January. Lending to private households also shows a similar trend with 3.2 percent in February.

The ECB has raised interest rates six times since July 2022, most recently in mid -March 2023 by 0.50 percentage points to combat inflation that was 8.5 percent in February 2023. This has been proven that the lending has been greatly reduced. The Bundesbank expects further interest rate increases from the ECB, which could further increase the uncertainties for the companies.

claims for support for companies

The economic data and predictions on which these measures are based underline the challenge for the ECB and the banks to find a balance between combating inflation and the need for stable economic growth. The coming months could be crucial for the development of both credit demand and the entire economy in the euro area.