Banks in Germany are set to leave their credit standards largely unchanged in the second quarter, results of the April Bank Lending Survey of the Bundesbank revealed Wednesday.
That said, a slight easing in credit standards is seen for lending to enterprises, especially small and medium-sized enterprises (SMEs).
The survey said German banks tightened credit standards modestly in the first quarter, but eased them slightly for loans to SMEs. The survey found a marked divergence in credit conditions.
The margins for loans to enterprises were expanded significantly for riskier loans and remained unchanged overall for loans of average risk, the survey said. Meanwhile, the margins for loans to households were narrowed, in some cases perceptibly, riskier loans for house purchase being the sole exception.
There was a significant decline in credit demand from enterprises in the first quarter. But, demand from the private construction sector rose markedly. Demand for funds from households was largely unchanged.
Survey participants also reported that German institutions' access to their sources of funding has clearly improved overall given the recovery in the financial markets. Banks also saw the possibility of issuing debt securities as having improved sharply.
Further, German banks did not perceive the easing in the European sovereign bond markets as having any impact on their credit standards for loans to enterprises and households.
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