FRANKFURT: Europe’s battered financial sector is showing further signs of healing as conditions for bank loans ease and demand for loans picks up, a key ECB survey showed yesterday.
Just a few days after the European Central Bank gave most eurozone banks a clean bill of health, its quarterly bank lending survey showed that banks are easing credit standards for customers across all loan categories.
In addition, demand for loans is also increasing, the European Central Bank wrote.
“According to the October bank lending survey (BLS), credit standards for all loan categories eased in the third quarter of 2014,” the report said.
Looking ahead, banks expect credit standards to continue to ease in the fourth quarter, and loan demand also to continue to pick up, the ECB continued.
The survery’s findings should provide some encouragement to the ECB, since the chronic weakness of credit activity in the euro area has been blamed for the absence of any noticeable
recovery in the 18 countries that share the single currency.
The European Central Bank complains that its ultra-easy monetary policy has not been feeding through into the real economy, because banks are not passing the money on in loans, particularly to the small and mid-sized enterprises (SMEs) which are the region’s economic
backbone. Reuters
