Banks in the euro area tightened lending conditions

Corporate demand for credit fell in the last quarter of last year.

Banks in the euro area also tightened lending conditions in the fourth quarter of last year for all categories of loans. This was pointed out by a survey published by the European Central Bank (ECB). According to the survey, commercial banks in the euro area have tightened the criteria for lending to businesses and consumers, while in the latter case both housing loans and consumer credit have been tightened. The reasons given by banks were the deterioration in the outlook for the economy, increased credit risk from clients, as well as lower risk tolerance. In addition, banks expect that the criteria for providing loans to companies and households will be tightened in the first quarter of this year. In addition, the survey showed that corporate demand for credit declined in the last quarter of last year. On the contrary, demand for mortgage loans continued to grow.