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2020.07.1412:47:00UTC+00Eurozone Banks To Tighten Lending Conditions For Enterprises In Q3

Eurozone banks are set to tighten credit standards on loans to enterprises in the third quarter amid coronavirus pandemic, the Bank Lending Survey from the European Central Bank showed on Tuesday.

Credit standards for loans to firms remained favorable in the second quarter, supported by fiscal and monetary measures.

Credit standards for loans to households tightened further in the second quarter reflecting deteriorated economic outlook, worsened creditworthiness of borrowers and a lower risk tolerance.

The net tightening of credit standards on loans to households is expected to continue in the third quarter.

Further, the survey showed that demand from firms for loans or drawing of credit lines surged further in the second quarter of 2020, reaching the highest net balance since the survey was launched in 2003.

At the same time, demand for housing loans declined strongly and the net demand for consumer credit and other lending to households reached a record low in the second quarter.

Banks expect that net demand for loans to enterprises will increase less in the third quarter.

Banks also expect an increase in net demand for housing loans and in particular for consumer credit and other lending to households in the third quarter. The survey was conducted among 144 banks between June 5 and 23.

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