Euro zone banks recorded a surge in emergency credit demand from corporate clients in the first quarter and a further rise is likely as the coronavirus pandemic batters the economy, the European Central Bank said in a bank lending survey today. 

Credit standards, or banks' internal loan approval criteria, were also tightened but this deterioration was "small" compared to the global financial crisis and the bloc's subsequent debt crisis, the ECB added. 

"Firms' demand for loans or drawing of credit lines surged in the first quarter of 2020, on account of firms' emergency liquidity needs," the ECB added. 

"In the second quarter, firms' loan demand is expected to increase further, to the highest net balance since the start of the survey in 2003," it said. 

Still, credit standards for corporate borrowers will likely to ease considerably in the second quarter, helped by ECB liquidity measures and government guarantees, the ECB said.

The ECB surveyed a total of 144 banks done between March 19 and April 3, the height of Europe's coronavirus lockdown. 

For households, credit standards were tightened more than for corporate clients and a further tightening is likely in the second quarter, the ECB added.