Eurozone banks tightened standards for company loans and consumer credit in the third quarter as higher interest rates weakened borrowing demand, a European Central Bank survey showed on Oct. 27.
On a weighted basis, the share of banks tightening criteria for company loans exceeded the share easing them by 9 percentage points, up from 7 points in the previous quarter.
The corresponding figure for consumer credit was 14 points.
Banks cited higher perceived risks and reduced risk tolerance, with some pointing to geopolitical uncertainty and energy market developments.
Mortgage approval criteria were broadly unchanged, but the survey’s housing loan demand indicator fell to its lowest level since the third quarter of 2023. Higher rates, weaker consumer confidence and a poorer housing outlook weighed on demand.
Banks expect further tightening across all loan categories in the final quarter, alongside weaker demand for mortgages and consumer credit. Demand from companies is expected to remain broadly unchanged.
The survey covered 159 banks and was conducted between Sept. 21 and Oct. 6.
