Banks across the euro zone are set to expand lending in the third quarter, easing access to mortgages, corporate loans and consumer credit, the European Central Bank said in a quarterly survey today.
Demand for loans continued to rise in the second quarter and access to credit became easier in most categories, driven in part by increased competition among banks and access to even cheaper wholesale and retail funding, the ECB said.
"While most factors contributed to a net easing of credit standards on loans to enterprises in the second quarter of 2017, competitive pressure remained the main contributing factor.
"For loans to households for house purchase and for consumer credit and other lending to households, competitive pressure and risk perceptions had an easing impact on credit standards," it added.
Among the euro zone's biggest countries, access to corporate credit eased the most in Italy and Germany while in the case of mortgages, notably easier conditions were recorded in the Netherlands and Italy, the ECB added.
Keeping borrowing costs ultra low with massive asset buys and negative policy rates, the ECB has managed to push lending growth to its best level since before the bloc's debt crisis, firming hopes that Europe is finally moving past a nearly decade-long economic slump.
Still, household and corporate lending are both expanding at less than half of the pre-crisis rate as banks, held back by nearly €1 trillion worth of soured debt, are reluctant to lend and instead sit on a massive cash pile.
The survey is based on responses from 142 banks collected between 12 and 27 June.