Euro zone lending to the private sector remains weak, despite the vast amounts of cheap cash banks in the region recently borrowed from the ECB.
The ECB said in a regular monthly report that growth in loans to the private sector slowed to just 0.6% in March from 0.8% in February.
The slowdown is of particular concern given that, in two special measures in December and February aimed at averting a credit squeeze in the euro zone, the ECB lent over €1 trillion to banks at a rate of 1% for a period of three years.
The thinking behind the unprecedented moves was that banks would lend the cheap funds on to businesses and households and keep credit flowing in the debt-wracked eurozone economy. However, the cash does not appear to be trickling through into the real economy just yet, the data suggested.
That seems to be more because overall demand for credit remains weak, rather than the unwillingness of banks to make loans available, analysts say.
Last week, in its regular quarterly survey on bank lending, the ECB found that a tightening of credit conditions had eased "substantially" in the first three months of this year and banks were expecting that trend to continue in the second quarter as well.
But small and medium-sized businesses still complained that getting bank loans has become harder, according to a separate ECB survey.
Economists warned that the latest lending data meant that tight credit conditions "remain a serious concern for euro zone growth prospects." They said that a further modest monthly fall in lending to businesses in March and a slowdown in the growth rate in lending to households "fuel concern that the €1 trillion loaned to European banks by the ECB is not feeding through to boost lending to the private sector.''
The ECB also calculated that growth of the euro zone money supply, a key indicator of demand in the economy, picked up again in March, with the M3 indicator rising to 3.2% last month from 2.8% in February.
The ECB regards the M3 figure as a key guide to inflation pressures and uses it to set interest rates accordingly. The central bank seeks to keep euro zone inflation below but close to 2% and it eased slightly to 2.6% in April from 2.7% in March, according to a first estimate from the European Union's Eurostat agency.
