January 2021 euro area bank lending survey

• Credit standards tightened for loans to enterprises and households
• Firms’ demand for loans continued to decline, while demand for housing loans increased
• Government guarantees on loans to firms supported bank lending conditions

• banks internal guidelines or loan approval criteria tightened across all loan categories, namely loans to enterprises, loans to households for house purchase and consumer credit and other lending to households in the fourth quarter of 2020, according to the January 2021 bank lending survey (BLS).
• In the first quarter of 2021, banks expect credit standards to continue to tighten for loans to firms and households.
• For loans to households for house purchase, banks overall terms and conditions also tightened in the fourth quarter of 2020.
• For consumer credit and other lending to households a net percentage of banks reported a decline in demand, following a moderate increase in the previous quarter.
• Euro area banks indicated that regulatory or supervisory action continued to strengthen banks capital position and had a strong easing impact on their funding conditions in 2020.
• The euro area bank lending survey, which is conducted four times a year, was developed by the Eurosystem in order to improve its understanding of banks lending behaviour in the euro area.
• The results reported in the January 2021 survey relate to changes observed in the fourth quarter of 2020 and expected changes in the first quarter of 2021, unless otherwise indicated.
• The January 2021 survey round was conducted between 4 and 29December 2020.

Notes

Chart 1 Changes in credit standards for loans or credit lines to enterprises and contributing factors (net percentages of banks reporting a tightening of credit standards and contributing factors) Source: ECB (BLS).
Chart 2 Changes in demand for loans or credit lines to enterprises and contributing factors (net percentages of banks reporting an increase in demand and contributing factors) Source: ECB (BLS).