ZCZC
BCN-36
ECB-EU-EUROZONE-BANKING-ECONOMY
Loan growth to eurozone businesses slows in October
FRANKFURT AM MAIN, Nov 28, 2018 (BSS/AFP) – Growth in lending to businesses
in the 19-nation euro area slowed in October, European Central Bank data
showed Wednesday, in a further sign of stuttering expansion in the bloc.
Adjusted for some purely financial transactions, growth in lending to non-
financial firms fell to 3.9 percent year-on-year in October, down 0.4 points
compared with the previous month.
With growth in loans to households steady at 3.3 percent, business
accounted for all of a 0.1-percentage-point slowdown in overall private
sector credit growth, to 3.3 percent.
The ECB eyes closely the pace of growth in lending to judge the
effectiveness of its policies to pump cash through the financial sector and
into the real economy — intended to power expansion and push inflation
towards its target of just below 2.0 percent.
Policymakers are widely expected next month to remove one pillar of easy-
money policy, mass purchases of government and corporate bonds, which have
amounted to almost 2.6 trillion euros ($2.9 trillion) since 2015.
ECB board member Sabine Lautenschlaeger told AFP last week that although
growth has slowed in the eurozone, to 0.2 percent between July and September,
and risks are looming “it is time to gradually normalise monetary policy.”
Extending the purchasing programme going forward “would not bring
significant additional benefits, but it would increase negative side
effects,” she said.
Even after so-called “quantitative easing” has ended, the ECB expects to
keep interest rates at historic lows into 2019 and to reinvest the proceeds
from its massive stockpile of bonds as they mature.
BSS/AFP/SR/1830 HRS