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

A City Is Can Be Converted To A Living Organism, Showcases China’s Huawei

Workers Would Be Helped To Lift More By These Robotic Vests

British Parliament to assess impact of e-cigarettes

Wind energy will provide 30% of Europe's needs by 2030

A Major Platform For Artificial Intelligence Is Its Mobile Devices: Apple

Rumor: Apple will release a budget version of iPhoneX

With China Set To Dominate, 1 Billion Could Be Using 5G By 2023

Deutsche Telekom unveils next gen 5G mobile antennas in Europe

Diamonds are now the new gold

Expert Body Says Driving In A Driverless Car In An Inebriated Condition Or On Drugs Should Be Legalized

World Politics

World & Politics

Japan demands to lift embargo on food from Fukushima

Bernard Arnault clarifies on Le Monde’s “Paradise Paper” report

South Korea and the U.S. present a united front against the North Korean leadership

Europe is preparing an alternative to NATO

Ten smartest cities in the world

Parties of Germany seek a common ground to create a coalition

Special counsel Robert Mueller’s Russian probe could see its first arrest today

Losing Steam Is North Korea’s Relationship With China – The Former’s Sole Ally