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Tue, January 28, 2025

Euro zone banks tighten companies' access to credit, ECB survey shows


Published on 2025-01-28 05:40:56 - Reuters
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  • Euro zone banks tightened firms' access to credit last quarter and expect further tightening in the first three months of 2025, a European Central Bank survey showed on Tuesday, reinforcing the case for more interest rate cuts as the economy slows.

The European Central Bank's (ECB) latest survey, released on January 28, 2025, indicates that euro zone banks have significantly tightened credit standards for companies, reflecting a cautious approach amid economic uncertainties. The survey highlighted that banks have increased the cost of borrowing and imposed stricter conditions on loans, driven by concerns over the economic outlook, borrower creditworthiness, and banks' own risk tolerance. This tightening of credit has led to a noticeable decrease in demand for loans from businesses, as higher interest rates and economic slowdown deter investment. Additionally, the survey noted a slight improvement in banks' access to funding, but overall, the lending environment remains restrictive, potentially impacting economic recovery in the region.

Read the Full Reuters Article at:
[ https://www.reuters.com/business/finance/euro-zone-banks-tighten-companies-access-credit-ecb-survey-shows-2025-01-28/ ]
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