Euro area banks tighten lending as loan demand falls
The ECB survey released on 27 October 2026 reports further tightening of corporate and consumer credit standards in the third quarter. Loan demand declined across all categories.
The net share of banks reporting tighter standards reached 9% for corporate loans and 14% for consumer credit. Housing loan standards were broadly unchanged. These indicators measure banks' responses, not a percentage change in lending volumes.
Banks cited heightened risk perceptions and lower risk tolerance. They expect further tightening in the fourth quarter; these are expectations rather than observed outcomes.
Meanwhile, September loan stocks continued to grow year on year, by 4.2% for firms and 3.1% for households. Growth in outstanding loans can therefore coexist with more restrictive conditions for new borrowing.