The slowdown in the euro area private sector lending is still closely linked to the sharp decline in real economic activity to a large extent, Commerzbank analyst Michael Schubert said Monday. But, to a somewhat increasing extent, it is related to supply factors like tighter credit standards.
Data released by the European Central Bank showed Monday that loans to the private sector were up 0.2% month-on-month in June, compared with an increase of 0.2% in May and a 0.2% decline in April.
The analyst said since the crisis broke out in summer 2007, there has been a marked increase in the percentage of banks which have tightened their credit standards.
Commerzbank's empirical studies suggest a growing influence of supply-side factors on lending momentum. The analyst pointed out that the strain put on lending growth by supply-side factors is unlikely to ease before 2010.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.