October Bank Lending Survey for Germany
The results of the latest Bank Lending Survey (BLS) indicate a certain easing in the adjustments of credit standards in the third quarter of 2009. According to the surveyed banks, it was only in isolated cases that credit standards were tightened in business with non-financial corporations, mainly on account of the perception of risk and with particular regard to sectoral and firm-specific factors. By contrast, there was a further sharp expansion in margins for both average-risk and riskier loans. At the same time, German institutions registered a perceptible rise in demand for loans to enterprises on balance, although this is likely to be due only in part to cyclical effects. Shifts within the market still appear to be more significant for the German aggregate. In particular, the smaller institutions taking part in the BLS reported an increase in their market shares.
In the case of lending to households, credit standards for loans for house purchase remained virtually unchanged, while they were tightened in some cases for consumer credit. Compared with the adjustments in the case of non-financial corporations, the changes in margins for loans to households were moderate, however. In this credit segment, too, banks reported a marked rise in demand. Especially in the case of consumer credit, however, this was probably due to the special factor of the expiring environmental premium for buying cars.
For the fourth quarter of 2009, the participants in the BLS expect no further changes in their credit standards for loans to enterprises, although they do anticipate a slight tightening in the case of loans to households.
The German responses concerning credit standards are very largely in line with those for the euro area as a whole.
The October survey again contained additional questions on the effects of the financial crisis on the lending behaviour of the banks surveyed. According to the information they provided, there were noticeably fewer problems in wholesale funding on the whole. Only the raising of funds through securitisations or the off-balance-sheet transfer of credit risk were cited as being significantly hampered. These two wholesale funding options are used only by a very small number of the German institutions participating in the BLS, however. According to the survey data, the wholesale funding difficulties that continued to exist for some institutions in the third quarter again had a perceptible influence on their credit standards. The responses to the questions on the effects of government measures to stabilise the financial system suggest that, on average, these measures have made market access slightly easier for the banks surveyed. Nevertheless, almost half of the institutions in the survey were still faced with constraints arising from capital restrictions, which were also reflected to a certain extent in the lending of the institutions concerned.
The aggregated survey results for Germany may be found at http://www.bundesbank.de/volkswirtschaft/vo_veroeffentlichungen.php