October results of the Bank Lending Survey in Germany

German banks’ lending policy remained virtually unchanged, on the whole, in the third quarter of 2013. This was the outcome of the latest round of the Bank Lending Survey. For loans to non-financial corporations, the surveyed institutions left both their credit standards and their margins largely unchanged on balance. A similar picture is evident for lending to households: banks’ credit standards showed no appreciable change for either loans for house purchase or consumer credit. The margins for loans for house purchase to borrowers with a good credit rating were narrowed moderately, while for riskier loans in this segment they were left unchanged. The banks also kept margins for consumer credit at the prior-quarter level. Institutions are not planning to make any significant changes to their credit standards in the fourth quarter of 2013 for either loans to enterprises or loans to households.

Banks responses indicated that enterprises’ demand for credit stagnated on balance in the third quarter of 2013 following an appreciable decline in demand a quarter earlier. Households’ demand for credit showed that the previous quarter’s development was persisting as institutions reported a perceptible uptick in demand for both loans for house purchase and consumer credit.

The October survey again included ad-hoc questions on banks’ funding conditions and on the impact of the sovereign debt crisis. The surveyed institutions replied that, as in the preceding quarters, funding conditions had improved. According to the banks, the sovereign debt crisis continued to have no impact on funding conditions and credit standards in the third quarter of 2013.

The aggregate results of the Bank Lending Survey for the euro area as a whole do not show any appreciable changes to standards for either loans to enterprises or loans to households. According to the surveyed euro-area institutions, demand for loans to enterprises continued to fall, although the decline was somewhat more moderate than in the preceding quarters. Households’ demand for credit did not decline for the first time since the end of 2010. Euro-area banks reported slight improvements in funding conditions, whereas they perceived that the sovereign debt crisis had virtually no impact on their credit standards.