Central bank survey shows continuing weak demand for credit; but bank finances steadier

The European Central Bank says demand from businesses for bank loans remains weak.

The ECB’s lending survey, released Wednesday, showed a “pronounced net decline” in business loan demand in the fourth quarter. The main reason: Companies are not seeing a need to finance new fixed investment such as buildings and machinery, a key component of any recovery.

The survey also shows banks continue to tighten credit standards.

The survey of senior loan officers at 131 banks did find banks themselves reporting better access to funds from deposits and borrowing. That means the banking system is regarded as steadier.

The ECB expects the economy of the 17 European Union countries that use the euro to shrink 0.3 percent in 2013 but start recovering later in the year.

sourche: The Associated Press