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2019.07.2305:00:00UTC+00Eurozone Businesses Faced Tighter Credit Standards In Q2: ECB Survey

Euro area banks unexpectedly tightened the conditions business firms should meet to get loans during the second quarter, due to an uncertain economic outlook, results of a quarterly survey by the European Central Bank showed on Tuesday.

By contrast, banks had expected credit standards to ease in the second quarter during the previous survey.

These are set to remain unchanged in the three months to September, the latest Bank Lending Survey from the ECB showed.

The latest tightening in credit standards for loans to enterprises marked the end of the net easing period that began in 2014, the ECB said.

While credit standards for loans to small and medium-sized enterprises, those for large firms were broadly unchanged.

Banks' risk perceptions and risk tolerance, as well as cost of funds and balance sheet constraints, contributed to a tightening of credit standards on loans to enterprises, while competition exerted pressure in the opposite direction, the ECB report said.

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