Aline Schuiling, senior economist at ABN AMRO, notes that the ECB’s Bank Lending Survey (BLS) for Q2 showed that banks, on balance, tightened lending standards on loans to companies.
Key Quotes
“The net percentage of banks that tightened standards rose to 5, up from -1 (net easing) in Q1. This tightening was in conflict with the forward looking part of the survey of the quarter before, when banks had expected to ease standards in Q2.”
“The forward looking part of the Q2 survey shows that banks expect to keep standards unchanged in Q3. The main reason for the shift in credit standards in Q2 was a deterioration in banks’ risk perceptions related to the general economic and firm-specific situation.”
“Overall, the results of the BLS are signalling that bank lending to companies is slowing down. Indeed, the annual growth rate of loans to companies has been moderating since the middle of 2018 and we expect it to decline more noticeably in the coming quarters.”
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