January Bank Lending Survey for Germany

Credit standards in Germany, according to the results of the Bundesbank’s latest survey, remained largely unchanged in the fourth quarter of 2011, too. The participating institutions reported a slight tightening only for long-term loans to enterprises. Credit conditions varied, however. Margins for loans to enterprises were expanded significantly, for example. By contrast, the surveyed institutions tightened their credit margins in the case of loans to households for house purchase, but saw no need to adjust margins for consumer loans. At the same time, the banks recorded an overall perceptible increase in the demand for funds, which was especially marked in the case of loans to households for house purchase and long-term loans to enterprises. For the first quarter of 2012, the institutions taking part in the BLS intend to leave their credit standards largely unchanged except for instances of a slight tightening again in long-term loans to enterprises.

In contrast to Germany, developments in credit standards in the fourth quarter in the rest of the euro area were characterised, along with reduced heterogeneity, by a marked tightening, which was particularly pronounced in the case of loans to enterprises and loans to households for house purchase. Furthermore, there was a sharp fall in demand, especially from households.

The January survey contained two ad hoc questions on the impact of the financial and sovereign debt crisis on the banks’ funding and credit standards as well as two further questions on the stricter capital requirements associated with “Basel III” [1]. The outcome was that the funding conditions have deteriorated only slightly for the German sample. Furthermore, the banks stated that the tensions in the European bond markets had led per se to a slight tightening of standards in lending to enterprises. In contrast, the institutions saw the crisis as having no effect on standards in retail lending. Regarding the preparation for the stricter regulatory regime imposed by the implementation of “Basel III”, the institutions stated that they had improved their regulatory capital ratio mainly by retaining profits and shrinking risk-weighted assets and that they intended to go on doing so more extensively in the first half of 2012. Additionally, the banks did not perceive Basel III as having any impact on credit standards in the past six month. In light of the new regime, they do intend to tighten slightly their standards for loans to enterprises in the first half of 2012, however.


1. See Basel III: A global regulatory framework for more resilient banks and banking systems, Basel Committee on Banking Supervision, Bank for International Settlements, 16 December 2010.