Featured Product

    ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020

    January 19, 2021

    ECB published results of the quarterly lending survey conducted on 143 banks in the euro area. The results reported in the survey relate to changes observed in the fourth quarter of 2020 and expected changes in the first quarter of 2021, unless otherwise indicated. The loan categories include loans to enterprises, loans to households for house purchase, and consumer credit and other lending to households. In addition to results for the euro area as a whole, the report also presents results for the four largest euro area countries—namely, Germany, France, Italy, and Spain. Bundesbank has separately published the results of the quarterly lending survey conducted on 34 banks in Germany. The ECB report reveals a net tightening of the credit standards on loans to firms in EU in the fourth quarter of 2020.

    The ECB lending survey included a number of ad hoc questions that address the impact of various factors on changes in banks’ lending conditions and demand for loans; these factors include the impact of the situation in financial markets on banks’ access to retail and wholesale funding, the impact of new regulatory and supervisory requirements on banks’ lending policies, the impact of banks’ non-performing loan ratios on their lending policies, and the impact of government loan guarantees related to the COVID-19 pandemic. Euro area banks indicated that regulatory or supervisory actions continued to strengthen banks’ capital position and had a strong easing impact on their funding conditions in 2020. Banks also reported that supervisory or regulatory actions continued to have a net tightening impact on their credit standards across all loan categories. Euro area banks reported that nonperforming loans had a tightening impact on credit standards and on terms and conditions for loans to enterprises and consumer credit in the second half of 2020 (and a broadly neutral impact for housing loans). Risk perceptions and risk aversion were the main drivers of the tightening impact of nonperforming loan ratios.

    The survey revealed that the net percentage of banks reporting a tightening of credit standards for loans or credit lines to firms was somewhat higher than in the previous round. Credit standards for loans to households also tightened but at a slower pace than in the previous quarters of 2020. Banks referred to the deterioration of the general economic outlook, increased credit risk of borrowers, and a lower risk tolerance as relevant factors for the tightening of their credit standards for loans to firms and households. Looking at a sectoral breakdown, respondent banks indicated a net tightening of credit standards for loans to enterprises across all main sectors of economic activities in the second half of 2020. The net tightening was most pronounced for loans to firms in the commercial real estate and the wholesale and retail trade sectors. Looking forward, in the first quarter of 2021, banks expect credit standards to continue to tighten for loans to firms and households. Also, in the first quarter of 2021, banks expect net demand for loans to firms, and for consumer credit, to increase and net demand for housing loans to decline.

     

    Related Links

    Keywords: Europe, EU, Banking, Bank Lending Survey, COVID-19, Credit Risk, Basel, NPL, Bundesbank, ECB

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8596