Banks in euro area continued to tighten credit standards in the first quarter of 2013, but less than in the previous quarter, a quarterly bank lending survey by the European Central Bank revealed Wednesday.
The net percentage of banks tightening their credit standards on loans to enterprises declined to 7 percent in the first quarter compared with 13 percent in the previous survey. The level of net tightening currently stood below its historical average since the start of the survey in 2003. Euro area banks expect a stable net tightening of credit standards for corporate loans in the second quarter compared with the first quarter, the survey report said.
As in the previous quarter, demand for loans to enterprises continued to fall at a broadly stable but pronounced rate in the first quarter of 2013. This reported net decline was substantially stronger than its historical average.
For the second quarter of 2013, euro area banks expect a substantially less negative net decline in demand for loans to enterprises, the report said.
ECB said the net tightening of credit standards on loans to households for house purchase declined slightly to 14 percent in the first quarter from 18 percent in the fourth quarter of 2012. Nonetheless, banks expect a lower net tightening of credit standards on mortgages in the second quarter of 2013.
Demand for housing loans continued to decline, on balance, in the first quarter of 2013 and the decline was more pronounced than in the previous survey. For the second quarter, the decline in housing loan demand is expected to be considerably less negative.
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