Eurozone banks tightened corporate credit access in Q3 and will curtail further as worries of a fresh wave of coronavirus infections rise, according to European Central Bank’s press release. Credit standards have been tightened on loans to enterprises, households, and consumer credit.
- Tighter credit access could curtail growth in the euro area and prompt the ECB to initiate further stimulus to keep the economies liquid.
- Banks expected credit standards to continue tightening for Q4 2020, reflecting economic recovery concerns and uncertainties on prolonging fiscal support measures.
- Banks anticipate corporate credit demand to moderate in Q4 with demand coming from small and medium-sized firms, while consumer credit will rise, but declines in housing loans demand
- Banks were already restricting credit access in Q3, demanding better collateral and selling loans on higher margins.
- Lending to non-financial firms grew 7.1% in September, the rate since June and not far below the ten-year high of 7.3% recorded in May.
European stocks are losing as the Euro gains. DAX is down 0.063%, CAC 40 is down 0.74%, EURUSD is up 0.09%
