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Banking district in Frankfurt am Main: Demand for loans is slowly increasing
Photo: DPA
Banks in the euro zone expect slightly stricter standards for corporate loans in the autumn quarter. That comes from the survey published on Tuesday by the European Central Bank (ECB) among 146 financial institutions. At the same time, they confirmed that they rate the credit risk as balanced overall. In the past summer quarter, the financial institutions kept their internal guidelines for lending to companies largely stable. At the same time, the companies have asked for a somewhat larger amount of loans. A further recovery in the lending business is expected for the current fourth quarter.
34 banks in Germany also took part in the ECB survey. As reported by the Bundesbank, the financial institutions surveyed in this country tightened their guidelines for the granting of corporate and housing loans slightly on balance in the third quarter. The standards for consumer and other credit, on the other hand, have been loosened marginally. At the same time, the demand for corporate loans continued to rise in Germany in the summer. But it fell well short of the banks' expectations from the previous quarter. According to the Bundesbank, this could indicate that the companies have sufficient liquidity - for example from subsidies: "On the other hand, the supply bottlenecks are likely to inhibit production expansion and investments."
The ECB asks financial institutions in the euro area four times a year about their lending business. It uses the findings from this report, known in technical jargon as the “Bank Lending Survey” (BLS), to shape its currently very loose monetary policy. The declared goal of the ECB is to ensure a favorable financing environment for the economy during the corona pandemic. The topic is likely to come up again at the interest rate meeting on Thursday, which is considered an intermediate step towards a decision on the future of the emergency corona program PEPP.
This is due at the ECB Council meeting in mid-December.
The PEPP program is expected to run until at least the end of March 2022.
Many experts assume that the ECB will not completely stop its bond purchases afterwards, but will continue its currently smaller APP purchase program in one form or another.
According to the Bundesbank, the APP and PEPP purchase programs have contributed to an improvement in the liquidity position of German commercial banks and their financing conditions on the market over the past six months.
mik / Reuters