Featured Product

    ECB Releases Results of Euro Area Bank Lending Survey in October 2021

    October 26, 2021

    The European Central Bank (ECB) published the results of the quarterly bank lending survey, which provides insights on bank lending conditions in the euro area. The survey supplements existing statistics with information on the supply of and demand for loans to enterprises and households. The results show that credit standards remained broadly unchanged for firms and tightened for housing loans, loan demand by firms and households continued to increase, and the monetary policy measures of ECB continue to support lending conditions and volumes.

    The results reported in the October 2021 survey relate to changes observed in the third quarter of 2021 and expected changes in the fourth quarter of 2021, unless otherwise indicated. The October 2021 survey was conducted between September 20, 2021 and October 05, 2021. A total of 146 banks were surveyed and the following results emerged:

    • Regarding loans to households for house purchase, euro area banks reported a net tightening of credit standards (net percentage of 8%), while credit standards for consumer credit and other lending to households also remained broadly unchanged (net percentage of -1%). Banks referred to risk perceptions related to the improved economic outlook as having a net easing impact on credit standards for loans to firms and households. Banks’ risk tolerance and their cost of funds and balance sheet situation had a neutral impact for loans to firms and consumer credit, while banks reported a net tightening impact of these factors for housing loans. In the fourth quarter of 2021, banks expect credit standards to tighten for loans to firms and for housing loans and to ease slightly for consumer credit.
    • Banks’ overall terms and conditions—that is, the actual terms and conditions agreed in loan contracts—eased slightly, on balance, for loans to firms, while they tightened for housing loans and remained broadly unchanged for consumer credit in the third quarter of 2021. For margins on average loans, banks continued to report a narrowing in net terms across loan categories. Margins on riskier loans also narrowed for housing loans but widened for firms and remained unchanged for consumer credit.
    • Banks reported, on balance, a slight increase in firms’ demand for loans or drawing of credit lines in the third quarter of 2021. Financing needs for fixed investment contributed positively to loan demand for the second consecutive quarter. In addition, loan demand was supported by firms’ financing needs for inventories and working capital, mergers and acquisitions, and debt refinancing and restructuring as well as the low general level of interest rates. Banks reported on balance that firms’ access to internal and alternative external financing sources had a negative impact on loan demand.
    • Euro area banks’ access to retail and wholesale funding continued to improve in the third quarter of 2021, as per the surveyed banks. Banks reported that the ECB’s asset purchase program, the pandemic emergency purchase program, and the third series of targeted longer-term refinancing operations (TLTRO III) continued to have a positive impact on their liquidity positions and market financing conditions. Asset purchases and the negative deposit facility rate had a net easing impact on lending conditions and a positive impact on lending volumes, mainly for loans to firms. Also, banks reported that TLTRO III had a net easing impact on terms and conditions and a positive impact on lending volumes across all loan categories.

     

    Related Links

    Keywords: Europe, EU, Banking, Lending, Bank Lending Survey, TLTRO, PEPP, Credit Risk, ECB

    Related Articles
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    News

    SEC Extends Comment Period on Climate Risk Disclosures

    The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.

    May 09, 2022 WebPage Regulatory News
    News

    APRA Reduces Committed Liquidity Facility, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.

    May 09, 2022 WebPage Regulatory News
    News

    CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks

    The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.

    May 06, 2022 WebPage Regulatory News
    News

    PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down

    The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.

    May 06, 2022 WebPage Regulatory News
    News

    EBA Updates Standards for 2023 Benchmarking of Internal Approaches

    The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.

    May 06, 2022 WebPage Regulatory News
    News

    EIOPA Responds to Stakeholder Views on Blockchain in Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.

    May 06, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8179