Featured Product

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

    October 27, 2020

    ECB published results of the quarterly lending survey conducted on 143 banks in the euro area. In addition to results for the euro area as a whole, this report also contains results for the four largest euro area countries, namely Germany, France, Italy and Spain. The results show that credit standards—that is, banks’ internal guidelines or loan approval criteria—tightened across all loan categories in the third quarter of 2020. The loan categories include loans to enterprises, loans to households for house purchase, and consumer credit and other lending to households.

    The survey revealed that credit standards for loans to households continued to tighten, with a net percentage of 20% for loans to households for house purchase and of 9% for consumer credit and other lending to households. 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. Banks’ overall terms and conditions  tightened in the third quarter of 2020 for new loans to enterprises, on account of wider loan margins, especially for riskier loans, and collateral requirements.

    For loans to households for house purchase, banks’ overall terms and conditions also tightened in the third quarter of 2020. Regarding euro area banks’ access to retail and wholesale funding, banks reported in net terms that access improved in the third quarter of 2020. This has been supported by the monetary policy measures of ECB. The asset purchase program of ECB, pandemic emergency purchase program, and the third series of targeted longer-term refinancing (TLTRO III) operations have had a positive impact on banks’ liquidity positions and market financing conditions. Among the largest euro area countries, credit standards on loans to enterprises tightened in Germany, Spain and France, while they remained unchanged in Italy in the third quarter of 2020. 

    Looking forward, for the fourth quarter of 2020, banks expect credit standards to continue to tighten for firms, reflecting concerns around the economic recovery as some sectors remain vulnerable, as well as uncertainties around the prolongation of fiscal support measures. The net tightening of credit standards on loans to households for house purchases is also expected to continue in the fourth quarter of 2020. In the fourth quarter of 2020, banks expect that net demand for loans to firms will rebound. Demand for housing loans is expected to fall, while demand for consumer credit is expected by banks to increase in the fourth quarter of 2020.

     

    Related Links

    Keywords: Europe EU Banking Bank Lending Survey COVID-19 Credit Risk Basel Credit Terms and Conditions ECB

    Featured Experts
    Related Articles
    News

    EC Rule on Contractual Recognition of Write Down and Conversion Powers

    The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.

    September 17, 2021 WebPage Regulatory News
    News

    APRA Issues Further Guidance on Application of Securitization Standard

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.

    September 16, 2021 WebPage Regulatory News
    News

    SRB Provides Update on Approach to Prior Permissions Regime

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.

    September 16, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits

    The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.

    September 15, 2021 WebPage Regulatory News
    News

    PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes

    The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).

    September 15, 2021 WebPage Regulatory News
    News

    Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics

    The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.

    September 15, 2021 WebPage Regulatory News
    News

    HKMA Endorses Industry Guidance to Support LIBOR Transition

    The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).

    September 14, 2021 WebPage Regulatory News
    News

    OCC Issues Booklet on Supervision of Problem Banks

    The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.

    September 13, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7481