ECB BLS: Banks tightened credit standards across all loan categories, driven by higher perceived risks and lower risk tolerance
Importance
Level 1
- Banks tightened credit standards across all loan categories, driven by higher perceived risks and lower risk tolerance
- Banks expect to also tighten credit standards in the second quarter, influenced by geopolitical tensions, energy developments, and higher funding costs
- Loan demand from firms and households expected to decrease, resulting from reduced financing for fixed investments, lower consumer confidence, and decreased spending on durables
- Nearly half of euro area banks use securitisation to grant new loans, manage credit risk and enhance liquidity and funding, relying on non-bank financial entities to purchase securitised loans