Home » Results of the July 2021 survey on the distribution of bank credit in the euro area

Results of the July 2021 survey on the distribution of bank credit in the euro area

by archyw

Press release

July 20, 2021

Results of the July 2021 survey on the distribution of bank credit in the euro area

  • The grant criteria are broadly unchanged after a significant net tightening in 2020
  • Demand for business loans was supported by GFCF
  • The conditions for granting bank credit reflect the continued support of the monetary, fiscal and supervisory authorities

According to the July 2021 survey on the distribution of bank credit, in the second quarter of 2021, award criteria – that is to sayinternal bank guidelines or their loan approval criteria – have remained broadly unchanged for business loans or lines of credit(net percentage of banks coming out at -1%, see graph 1). The grant criteria were also broadly stable in net terms for the housing loans to households(net percentage of – 1%) and for consumer and other loans to households(net percentage of 0%). These developments follow a significant net tightening of the criteria for granting loans to businesses and households observed in 2020 and a slight net tightening observed for businesses in the first quarter of 2021. They reflect the overall improvement in the economy of the euro zone with the lifting of containment measures and the continued support provided by the monetary, budgetary and prudential supervisory authorities. The significant net tightening observed previously, induced mainly by the perception of risks associated with an increase in credit risks, attenuated for the different categories of loans: for loans to businesses, there was no new trend. perception of risk, while the previous sharp tightening in risk perception has given way to a slight net easing for home loans. Competition from other banks has also had an effect

European Central Bank

Directorate-General for Communication, Media Relations Division

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Phone. : +49 69 1344 7455, email: [email protected], website : www.ecb.europa.eu

Reproduction authorized, citing the source

Translation: Bank of France

Press release / July 20, 2021

Results of the July 2021 survey on the distribution of bank credit in the euro area

limited net relaxation on the grant criteria. The banks ‘cost of funding and their balance sheet position essentially had a neutral effect on grant criteria, reflecting the banks’ strong capital ratios and favorable funding costs. For the third quarter of 2021, banks expect a slight tightening of the criteria for granting loans to businesses and a generally unchanged situation for households.

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The general terms and conditions practiced by banks– corresponding to the actual terms and conditions agreed in the loan contracts – eased, on the whole, for loans to businesses and households in the second quarter of 2021. This development is mainly explained by a tightening of the loan margins standard. At the same time, banks reported broadly unchanged or higher margins for riskier loans in net terms.

Banks overall reported a slight increase in request for loans or drawings on business lines of creditin the second quarter of 2021 (see Chart 2). For the first time since the third quarter of 2019, corporate GFCF financing needs positively contributed to loan demand, suggesting that companies may now be less reluctant to invest. On the other hand, their working capital financing needs (WCR) remained unchanged due to the liquidity cushions available to companies and the probable recovery in their income given the improvement in the economic situation. Banks reported a sharp net increase in housing loan applicationin the second quarter of 2021. The strengthening of consumer confidence, the favorable outlook for the real estate market and the general low level of interest rates all contributed to a net increase in demand. Regarding consumer and other loans to households, demand for loans also increased in net terms, largely as a result of increased consumer confidence and increased spending on durable goods. For the third quarter of 2021, banks expect a further increase in net demand for loans from businesses and households.

According to the banks surveyed, eurozone banks’ access to retail finance and interbank refinancing continued to improve in the second quarter of 2021. Banks said their non-performing loan ratios (NPLs) have improved. had a moderate net tightening effect on their criteria for granting loans to businesses and an overall neutral impact on the criteria for granting loans to households in the first half of 2021. In addition, banks reported a net tightening moderate criteria for granting loans to businesses for the main economic sectors in the first half of 2021, reflecting a moderate net tightening of the criteria for granting loans to all companies in the first quarter and for granting criteria

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European Central Bank

Directorate-General for Communication, Media Relations Division

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Phone. : +49 69 1344 7455, email: [email protected], website : www.ecb.europa.eu

Reproduction authorized, citing the source

Translation: Bank of France

Press release / July 20, 2021

Results of the July 2021 survey on the distribution of bank credit in the euro area

broadly unchanged in the second quarter. Eurozone banks have also reported a net increase in demand for loans or lines of credit for most economic sectors. Finally, euro area banks reported that coronavirus-related state guarantees (COVID-19) continued to support bank lending terms for corporate loans, while demand for loans backed by guarantees decreased in net terms in the first half of 2021.

The survey on the distribution of bank credit in the euro area, which is carried out four times a year, was developed by the Eurosystem in order to better understand the behavior of banks with regard to lending in the euro area. The results presented in the July 2021 survey relate, unless otherwise indicated, to the changes observed in the second quarter of 2021 and to the changes expected in the third quarter of 2021. The July 2021 campaign was carried out from 14 to 29 June 2021. As of In total, 142 banks were interviewed for this survey, with a response rate of 100%.

For all inquiries, the media can contact Silvia Margiocco at: +49 69 1344 6619.

Notes :

  • A report corresponding to this survey campaignis available on the ECB’s website. A copy of the questionnaire, a glossary of terms used in the survey and a user guide, along with information about the survey series, can also be found on this web page.
  • The series relating to the euro area and national series are available in the Statistical Data
    Warehouse(Statistical Data Warehouse) of the ECB. The national results, published by the various national central banks, can be obtained from the ECB’s website.
  • For more detailed information concerning the survey on the distribution of bank credit, cf. Köhler-Ulbrich (P.), Hempell (H.) and Scopel (S.), “ The euro area bank lending survey», Occasional Paper Series, n° 179, BCE, 2016.
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European Central Bank

Directorate-General for Communication, Media Relations Division

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Phone. : +49 69 1344 7455, email: [email protected], website : www.ecb.europa.eu

Reproduction authorized, citing the source

Translation: Bank of France

Press release / July 20, 2021

Results of the July 2021 survey on the distribution of bank credit in the euro area

Graph 1

Changes in the criteria for granting loans or lines of credit to businesses and contributing factors

(net percentages of banks reporting a tightening of grant criteria and contributing factors)

Source: ECB (survey on the distribution of bank credit).

Notes: Net percentages are defined as the difference between the sum of the percentages of banks responding “strong tightening” and “slight tightening” and the sum of the percentages of banks responding “slight easing” and “significant easing”.

Graph 2

Changes in demand for business loans or lines of credit and contributing factors

(net percentages of banks reporting increased demand and contributing factors)

Source: ECB (survey on the distribution of bank credit).

Notes: The net percentages for the demand questions are defined as the difference between the sum of the percentages of banks responding “significant increase” and “slight increase” and the sum of the percentages of banks responding “slight decrease” and ” significant decrease ”.

European Central Bank

Directorate-General for Communication, Media Relations Division

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Phone. : +49 69 1344 7455, email: [email protected], website : www.ecb.europa.eu

Reproduction authorized, citing the source

Translation: Bank of France

Disclaimer

Bank of France published this content on 20 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 July 2021 14:25:09 UTC.

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