Daily Management Review

Eurozone Banks Expect Growth in Demand for Credit as a Result of QE


04/14/2015


Eurozone banks expect a high demand for loans from companies and home buyers in the coming months, as the European Central Bank monetary emission improves financing conditions, a study has found.



These results are the most obvious sign that lending rates in the euro area is accelerating. They are in line with the general improvement of economic indicators suggesting that prices in the currency bloc are beginning to stabilize.

The quarterly survey of bank lending shows that lending standards gradually softened, although the process is expected to be slow everywhere, except in certain countries, such as Italy.

- In terms of the level of lending standards, significant improvement compared with benchmarks banks a year ago is observed, - said a report by the ECB.

The study found that 9 percent of banks eased credit conditions in the last quarter and 1 percent suggests facilitate them in the next three months.

Overall, 39 percent of banks expect an increase in demand for loans from companies in the next three months, while 29 percent predict a rise in demand for loans from buyers.

Among the major Eurozone countries, Italy showed very good results: 25 percent of its banks eased lending standards over the past three months, whereas Netherlands and France have done 13 and 7 percent, respectively.

- It's an improvement, but compared to the very low base - said Jack Allen from Capital Economics. - The willingness of banks to lend to grow, but it comes after six years of tightening standards. Eurozone yet lags far behind the United States.

In another part of the study stated that the ECB stimulus program totaling to 1 trillion euros, which began in March, is beginning to bear fruit.

Nearly half of all banks reported a positive impact on their financing terms of quantitative easing, or the issue of money for buying, mainly government bonds.

However, many have said that it is likely to have a negative impact on their profits, as the margin on loans may be reduced.

According to head of financial brokerage Danske Bank Kestutis Gedgaudas, inflation in the euro zone is growing faster than expected, and signs of economic recovery become visible, but core inflation remains very low - 0.6%. Therefore, at the meeting of the European Central Bank, which will be held this week, changes in the direction of monetary policy are not expected. It was reported today, April 14, in the Lithuanian branch of Danske Bank.

Danske Bank analysts believe that the ECB President Mario Draghi will continue to emphasize the need for quantitative easing, the risk of deflation and economic growth below potential. Today in the euro zone, statistics of industrial growth in February will be announced. It is believed that in February compared to January production rose by 0.4%.

Inflation data for March in the United States will also appear this week. Danske Bank forecasts that annual inflation in March was zero, while core inflation (if we exclude the change in prices for energy and food) reached 1.7%.

source: investing.com






Science & Technology

How China became a pioneer of the solar industry

CNBC: Intel leaves the wearable gadgets market

Oculus Rift falls in price…again

Ukraine Police Official Says Likely Cover For Malware Installation Was Global Cyber Attack: Reuters

Researchers See 'Wannacry' Link As Another Cyber Attack Sweeps Globe

AEON and IBM to create a blockchain platform

Toyota & Cartivator Are Building Flying Cars To Light Up The Olympic Flame Of 2020

Stock trading computers are not a future anymore

Temper Technology With Humanity - Apple's Cook Tells MIT Graduates

As Spying And Crime Tools Mix, Blame Game For Cyber Attacks Grows Murkier

World Politics

World & Politics

CNN: Rex Tillerson may leave the post of US Secretary of State

Its South China Sea Territory Being Protected By Indonesia From 'Foreign' Threats

A Swarm-Like Attack From North Korea Could ‘Overwhelm’ South Korea's THAAD Missile Shield

Powerty in Italy tripled in 10 years

Hackers steal a businessman's reputation in Sweden

PWM reveals best citizenship-by-investment programs

Austria gathers troops to shelter itself against refugees

In Thirty Years Human Beings Will Work Only 'Four Hour A Day', Predicts Jack Ma