German Banks Tightened Corporate Credit Relatively Little
Recent discussions have highlighted the trend for financial institutions to tighten credit standards. Given the confluence of challenging external factors, this move is not surprising. In this context, the European Central Bank’s (ECB) Bank Lending Survey is important. This survey gathers insights from the chief credit officers of 157 leading banks in the euro area.
The chart below shows the weighted average of banks that have tightened their credit standards for corporate loans over the past eight quarters:
– Banks in Luxembourg and Estonia have been the most stringent in this respect.
– In contrast, Belgian banks have almost not tightened credit standards and Greek banks even eased corporate credits
– German financial institutions have shown a comparatively moderate degree of tightening.