Economic Buzz: Eurozone Banks Expects Fall In Demand For Housing And Corporate Loans

25 Oct 2022 , 04:08 PM

The euro area banks expect fall in demand for housing and corporate loans in the fourth quarter, the Bank Lending Survey from the European Central Bank showed. Reflecting rising interest rates and easing consumer confidence, demand for housing loans declined substantially in the third quarter. Demand for consumer credit and other lending to households also decreased in net terms. However, there was an increase in demand from firms for loans or drawing of credit lines due to rising financing needs for working capital and inventories. For the fourth quarter, lenders expect a further strong net decrease in the demand for housing loans and relatively strong fall in demand for consumer credit. Banks reported a strong net tightening of credit standards for loans to households for house purchase. They tightened lending standards for consumer credit as well. For the fourth quarter, euro area banks expect a significantly stronger net tightening of credit standards on loans to firms. In addition, banks forecast credit standards to continue to tighten for both housing loans and consumer credit.Powered by Commodity Insights