The ECB said standards were relaxed across all categories in the second quarter of this year and that net demand continues to recover for both household and enterprise borrowing. Banks also told the ECB in the survey that they were strengthening their capital positions and reported a slight increase in risk-weighted assets.
“For the first time since the second quarter of 2007, euro area banks reported a net easing of credit standards on loans to enterprises, with a net percentage of -3%, compared with a marginal net tightening of credit standards in the previous quarter,” the ECB said. “In addition, euro area banks’ access to funding improved in net terms for all main market instruments.”
The BLS results were based on the answers of 137 banks. The survey was conducted between June 26 and July 11.
“Only a major disappointment would put the debate over credit easing back on the ECB’s agenda, particularly after the June monetary developments report showed a more encouraging picture for monthly flows of bank credit. In addition, the survey was conducted between mid-June and mid-July, after the ECB announced its easing package and credit conditions could have benefit from these announcements. On balance, we believe that these releases should comfort the ECB in its wait-and-see stance for now,” analysts at Crédit Agricole commented on Monday.
Lending to euro-area households and companies declined for the 26th consecutive month in June, the ECB said on July 25, with a 1.7 percent contraction from a year earlier.