PARIS (MNI) – Banks in Italy tightened conditions on business loans
moderately in the third quarter even as demand for credit slumped in the
face of a weakening economy and declining investment, the Bank of Italy
said Wednesday.
However, the central bank said it expected banks to ease up on
business lending restrictions in the last three months of this year.
Credit standards for families – on mortgages, consumer loans and
other lending – were unchanged in the third quarter, the central bank
said.
The Bank of Italy’s quarterly report on credit is part of the
European Central Bank’s bank lending survey for the entire Eurozone,
which was published earlier in the morning. The ECB survey showed that
euro area banks expect the decline in demand for loans to decelerate
over the next three months, though they said they will continue to
tighten credit standards as they did in 3Q.
The Bank of Italy said Italian banks had imposed “slightly more
restrictive” conditions on business loans in the third quarter,
following a “significant” easing of standards in the first half of the
year. The third quarter tightening reflected a “moderate deterioration
in the outlook for economic activity,” the bank said. “This restriction
should ease again in the current quarter.”
Meanwhile, demand for loans from businesses and families was “very
weak” in recent months, the Bank of Italy said. For businesses, this was
due in large part to an “enduring weakness of demand for financing of
fixed investment.” For families, beyond a decline in consumer confidence,
a deterioration in the housing market and weak consumer spending
contributed to the slack loan demand, the central bank said.
–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com
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