The European Central Bank's (ECB) latest bank lending survey, published Tuesday, revealed a net tightening of credit standards for businesses across the euro area in the fourth quarter of 2024. According to the report, stricter criteria stemmed from heightened economic risks and lower bank risk tolerance.
Demand for business loans remained weak, supported only slightly by lower interest rates. In contrast, housing loans saw a strong rebound, driven by declining lending rates and margins, following a prolonged slump in previous years. Consumer credit standards also tightened further, with 6% of banks citing increased risks, although demand for these loans rose slightly.
"For the first quarter of 2025, banks expect a further net tightening of credit standards for loans to firms and consumer credit, and a small net tightening for loans to households for house purchase," the report said.