Easing of credit conditions across the Eurozone will keep the ECB on hold – ING

By FXStreet FXStreet (Delhi) – Peter Vanden Houte, Research Analyst at ING, suggests that given the continued discussions on the impact of the ECB’s non-standard monetary policy measures, today’s Bank Lending Survey gives some indications to what extent the transmission mechanism has been working.

Key Quotes

“Banks in the Eurozone reported a net easing of loans to enterprises (-4%) in the fourth quarter of 2015. Credit standards on loans to households saw a significant net easing (-7%), while standards on consumer loans remained broadly unchanged (+1%). Amongst the bigger Eurozone countries the credit easing trend was the most prominent in Italy.

For the first quarter of 2016 banks expect a further easing of credit standards on loans to enterprises (-4%), a slight easing for housing loans (-1%) and a more significant loosening for consumer credit (-8%). Competition proves to be the main driver behind the improved credit standards. Interestingly, for Italy the improving situation in terms of cost of funds and balance sheets also was an important contributor to easier credit conditions.

Loan demand is definitely picking up on the back of low interest rates and easier credit standards. For the fourth quarter net loan demand by enterprises increased significantly (net balance of banks reporting …read more

Source:: FX Street