January results of the Bank Lending Survey in Germany
Credit standards for lending to non-financial corporations in Germany have been tightened slightly, according to the latest survey findings in the fourth quarter of 2012. With regard to credit conditions, the only restrictive adjustments made by the surveyed banks since the third quarter were in margins, although these adjustments were considerable. The surveyed banks likewise tightened standards slightly for loans for house purchase, while showing themselves to be somewhat more accommodating with regard to consumer credit. In return, the banks moderately expanded their margins in consumer credit and for riskier loans for house purchase. For the first quarter of 2013, the surveyed institutions intend to tighten credit standards significantly in loans for house purchase, while hardly any adjustments are planned for the other two lending categories.
Furthermore, the banks taking part in the survey noted stagnating financing needs in the case of enterprises as well as a slight net decline in demand for consumption purposes. By contrast, households’ demand for loans for house purchase showed a further large increase in the final quarter of the year, too, as the assessment of the outlook on the housing market remained very optimistic.
The January survey round contained a number of ad hoc questions on banks’ wholesale funding conditions, as well as the impact of the sovereign debt crisis and the stricter capital regime.The surveyed German institutions reported that there was a marked overall improvement in their funding environment. They also stated that the sovereign debt crisis did not have any adverse effects on their funding conditions or lending policy. In preparation for the capital requirement directive CRD IV, German institutions themselves stated that they have further reduced risk-weighted assets and strengthened their capital position.
Banks in the euro area as a whole tightened their lending policies in all surveyed lending categories. The interviewed bank managers gave the deterioration in the perception of risk as the main reason for stricter credit standards. At the same time, there was a further decrease in demand for loans in all the surveyed lines of business. At the European level, too, banks reported an overall improvement in access to wholesale funding markets. Nevertheless, the sovereign debt crisis, in and of itself, continued to have negative effects on funding, although these were very limited. In terms of preparations for the new, stricter capital requirements, the information provided by banks in other euro-area countries is, however, largely comparable to that in the German subsample.