The ECB's quarterly bank lending survey, which provides information on bank lending conditions in the eurozone, showed that the credit downturn is showing the first signs of slowing down. The January 2024 survey round was conducted between 8 December 2023 and 2 January 2024. A total of 157 banks were surveyed in this round, with a response rate of 100%.
Credit standards for loans or credit lines to enterprises tightened further, albeit moderately, in the fourth quarter of 2023 (net percentage of banks of 4%).
Banks also reported a further net tightening of their credit standards for loans to households
Risk perceptions were a major driver of the tightening of credit standards for loans to firms and households, with lower risk tolerance also driving the tightening of credit standards for consumer credit. The net percentage of banks reporting a tightening moderated compared with the previous quarter across the three loan categories and was below the historical average for housing loans and loans to firms.
For the first quarter of 2024, euro area banks expect further net tightening of credit standards on loans to firms and households.
Banks again reported net decreases in demand from firms for loans or drawing of credit lines, demand for housing loans and demand for consumer credit and other lending to households in the fourth quarter of 2023.
Across loan categories, the decline in demand was driven by the general level of interest rates.
Lower fixed investment dampened firms’ demand for loans, while subdued consumer confidence and housing market prospects reduced demand from households for loans.
For the first time since early 2022, banks expect a small net increase in demand for loans to firms and for housing loans in the first quarter of 2024.