Eurozone economic weakness!
A tightening impact on lending standards! According to Nick Kounis, Head Financial Markets Research, ABNAmro, ‘loan demand reflects Eurozone economic weakness!’ By focussing Euro Macro, Nick says, corporate demand for bank loans now stagnating – The ECB’s Bank Lending Survey (BLS) for 2019Q1 was published. In contrast to what banks had expected in 2018Q4, lending standards on loans to non-financial companies did not tighten in 2019Q1, but remained unchanged. On balance, banks reported that cost of funds and balance sheet constraints (driven by costs related to banks’ capital position) had a tightening impact on lending standards. Also banks’ risk perceptions had had a tightening impact, for the first time since the start of 2017. However, these tightening factors were offset by an easing impact of increased competition. The forward looking part of the BLS showed that banks expected to ease lending standards slightly on balance in 2019Q2. On the other side of th