23 January 2024

• There was a moderate net further tightening in credit standards for loans to firms, with more tightening expected in the first quarter of 2024
• Demand for loans by firms and households continued to decrease substantially, albeit less steeply than in the previous quarter
• Bank lending conditions tightened more in real estate and construction than in other sectors

According to the January 2024 euro area bank lending survey (BLS), credit standards – i.e. banks’ internal guidelines or loan approval criteria – for loans or credit lines to enterprises tightened further, albeit moderately, in the fourth quarter of 2023 (net percentage of banks of 4%; Chart 1). This adds to the substantial cumulative tightening since 2022, which has contributed – together with weak demand – to the strong fall in loan growth to firms. Banks also reported a further net tightening of their credit standards for loans to households, which was small for loans to households for house…