The treath about financial and banking crisis
The financial and banking crisis has long been worrying and is having an increasingly threatening effect on the real economy. The recent surveys by the European Sentro Bank are also unlikely to lighten sentiment: Contrary to many reports to the contrary, the economy is facing a credit crunch. Banks appear to be restricting their lending to corporates and households, on the one hand wanting to reduce their balance sheets and, on the other hand, having difficulty refinancing extended loans.
In December, for the first time since the introduction of the euro in 1999, banks issued lesser-volume loans to consumers and businesses than in the previous month, as the HED now announces. The volume of all loans fell by 47 billion euros or 0.4 percent. The growth rate of lending declined from 71 to 5.8 per cent relative to December. Loans to households have expanded by only 2.5 percent weaker than ever. Sluggish lending poses a menacing risk to the eurozone economy, which has been in recession since the spring, with a slowdown in consumption and investment likely to compound the downturn and unemployment, income declines as well as corporate failures.
The attributable to the behavior
However, it is not entirely uncontroversial among experts whether swindle lending is attributable to the behavior of banks or whether households and companies are simply in less demand. Alliance’s chief economist, Vinz, sees many projects in the EU fallow due to lack of funding. Other observers blame the debtors for the misery.
In the view of many economists, the HED will counteract further monetary policy easing and cut interest rates even further. Currently, the minimum bid rate is 2.00 percent. However, the next rate cut is expected in March and not on 5 February at the next meeting of the HED Executive Board. If you are looking for a loan, you can soon be happy about better conditions if the bank is ready to pay.