ECB Euro area bank lending survey: net 14% of EZ banks tightened credit standards in Q2 vs. 27% in Q1

• Banks expect more moderate net tightening on loans to firms in Q3.


• The cumulated net tightening since the beginning of 2022 has been substantial.


• Firms’ net demand for loans fell strongly in the second quarter of 2023, dropping to an all-time low since the start of the survey in 2003


• In Q3 banks expect a further net decrease in demand for loans to firms, but much smaller than in the second quarter.


• Banks reported that their access to funding deteriorated in most market segments in Q2 2023, especially in retail funding.

Via ECB

Analysis details (09:07)

• The takeaway from the release is that demand for loans by firms in Q2 fell to the lowest level since the survey began in 2003 as access to credit continues to be tightened. 


• Allied with the soft PMI metrics yesterday, this will be food for thought for the ECB and will likely temper some of the more hawkish views on the Governing Council over how much more tightening is required/the bloc can handle. 

25 Jul 2023 - 09:00- Fixed IncomeData- Source: Newswires