ZCZC
BCN-09
ECB-EU-EUROZONE-BANKING-CREDIT
Eurozone banks turn screws on borrowers
FRANKFURT AM MAIN, April 9, 2019 (BSS/AFP) – Eurozone banks are toughening
their requirements of prospective mortgage borrowers, a European Central Bank
survey published Tuesday showed, although demand for home purchase loans
continued to swell in early 2019.
Credit standards — the boxes house-hunters have to check to receive a
mortgage — tightened by three percent between January and March, lenders
told the Frankfurt institution.
Meanwhile “net demand for housing loans continued to increase in the first
quarter… driven mainly by the low general level of interest rates,” the ECB
added.
Although demand for other forms of consumer borrowing also grew, companies’
appetite for credit was only “stable” compared with the previous quarter,
marking time after continuous increases since early 2015.
January’s round of the quarterly poll of almost 150 banks had forecast a
slowdown in demand for loans, as weaker economic indicators pointed to
slowing growth in the 19-nation eurozone.
In the event, ‘hard’ data and ‘soft’ pointers from surveys have both
confirmed that the weaker expansion seen in late 2018 has persisted into the
new year.
The ECB last month lowered its annual growth forecast for 2019 by 0.6
points, to 1.1 percent — following in the footsteps of organisations like
the International Monetary Fund.
It blamed a familiar litany of culprits including uncertainty over Brexit
and trade spats between the US, China and the European Union.
Frankfurt policymakers see the soft patch lasting until around the middle
of the year before a resurgence in the second half, ECB Vice-President Luis
de Guindos told European Parliament lawmakers last week.
Meanwhile Portuguese finance minister Mario Centeno — who leads regular
“Eurogroup” meetings of treasury bosses from the single currency area — last
week said a Brexit deal and trade truces between Washington, Beijing and
Brussels could help lift the clouds.
BSS/AFP/SR/2000 HRS