Eurozone Banks Tighten Lending Standards For Firms & Consumer Credit

(RTTNews) - Eurozone banks tightened its lending standards for loans to firms due to rising risks to the economic outlook and geopolitical uncertainty but maintained its standards for loans for house purchase in the third quarter, the bank lending survey results from the European Central Bank showed Tuesday.

Banks tightened credit standards for consumer credit in the third quarter on changing risk perceptions.

For the fourth quarter, banks expect credit standards to remain broadly unchanged for firms, tighten slightly for housing loans and tighten further for consumer credit.

There was a slight increase in demand for loans or credit lines to firms as there was a decline in lending rates and increased financing needs for debt refinancing.

Driven by improved housing market prospects and declining lending rates, there was a sustained increase in housing loan demand. Demand for consumer credit and other lending to households was broadly unchanged with falling interest rates.

In the fourth quarter, banks expect unchanged loan demand from firms, a further net increase in demand for housing loans, and a small increase in demand for consumer credit.