July Bank Lending Survey for Germany

According to the results of the latest round of the Bank Lending Survey, participating German banks did not change their lending policies any further in the second quarter of 2011 after reporting perceptible easing a quarter earlier. Respondents saw no need for adjustment to either their credit standards or conditions in corporate lending business or retail lending business. Only the margins on exposures to borrowers with lower credit ratings were expanded somewhat, whereas for average loans they remained largely unchanged. At the same time, banks observed an increased demand for funding in all three surveyed lending categories. Institutions assume that credit standards for small and medium-sized enterprises and for loans to households for house purchase will ease somewhat in the third quarter, whereas they do not expect any adjustment with respect to other types of lending.

Developments in the euro area were once again very uneven in the second quarter; overall, conditions for all three types of lending tightened somewhat, with demand in some business areas declining.

The July survey round once again contained an ad hoc question on the impact of the financial crisis on wholesale funding and two other questions on planned and actual adjustments to the stricter capital requirements commonly referred to as “Basel III”.1 The German banks taking part in the survey saw little change in their access to wholesale funding on the money and capital markets compared with the preceding quarter, whereas the overall sample of European banks reported a certain deterioration on balance. Respondent institutions in both Germany and the euro area as a whole said they had strengthened their capital base in preparation for Basel III through, above all, earnings retention, and that they would continue this measure in the second half of 2011 and next year. However, survey respondents in the rest of the euro area attached more importance to reducing risk-weighted assets than did the reporting German banks.

The aggregate survey results for Germany may be found at http://www.bundesbank.de/volkswirtschaft/vo_veroeffentlichungen.en.php.


  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 (www.bis.org/publ/bcbs189.pdf).