Eurozone banks tightened credit standards for firms in the fourth quarter, citing higher perceived risks amid lower risk tolerance, while demand for loans from firms increased slightly, the survey from the European Central Bank showed on Tuesday.
Banks reported an unexpected tightening of credit standards for loans to enterprises in the fourth quarter, following a smaller net tightening in the third quarter, the bank lending survey revealed.
Concerns about the outlook for firms and the broader economy, as well as banks’ lower risk tolerance, contributed to tighter credit standards, the survey showed.
Banks reported a small net easing of credit standards for housing loans but tightened further for consumer credit in the fourth quarter.
For the first quarter of 2026, banks expect a moderate further net tightening of credit standards for firms, a slight tightening for housing loans and a more marked tightening for consumer credit.
There was a small increase in demand for loans to firms, while demand for housing loans grew moderately. The survey was conducted between December 15 and January 13 among 153 banks.
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