Credit Requests of Companies are Rising in Europe

Credit Requests of Companies are Rising in Europe

As a result of the economic activities coming to a halt due to the coronavirus epidemic across Europe, the urgent loan requests of the companies gradually increased. Looking at the results of the survey published by the European Central Bank on corporate and consumer loans for the first quarter of the year, the urgent loan demand of companies in the European region started to increase in the first quarter of the year. The credit principles or internal approval criteria of banks in the European region tightened in the first quarter, but this tightening was considered inadequate due to the measures taken by governments compared to the 2008 financial crisis and the European debt crisis. "In the first quarter of 2020, companies' credit requests or credit line utilization rose due to their urgent liquidity needs, " the European Central Bank said in its assessment of the rise in demand for emergency loans. In the second quarter, net loan requests of companies are expected to rise to the highest level since the beginning of the survey on bank lending in 2003." statements have been made. In the statement, which emphasized that banks suitable for household use in the European region tightened more than corporate customers, it was stated that these standards would be tightened in the second quarter of the year. The Bank of Europe's Bank Credit Survey, which causes Eurosystem to have information about the credit conditions of banks in Europe, is carried out 4 times a year. The last survey, conducted between March 19 and April 3, when economic activity came to a halt due to the coronavirus epidemic, was conducted with the participation of 144 banks.