ECB quarterly bank lending survey: in the three months to September, 159
euro-area banks tightened corporate lending standards and reported weaker loan
demand. Survey period: Sept. 21–Oct. 6. The ECB said its rate hikes are helping
cool economic activity; banks cited rising risk perceptions and lower risk
tolerance as primary drivers of tighter standards. Several banks flagged
heightened pressure from geopolitical uncertainty and energy-market shifts, and
noted the US–Iran conflict increased risk concerns. The share of rejected loan
applications rose. Loan demand fell unexpectedly versus banks’ prior
expectations, reflecting higher borrowing costs and the overall level of
interest rates. The ECB raised key rates by a cumulative 50bps in June and
September. Officials are expected to hold rates on Thursday and to raise by
25bps in December.
