Eurozone banks have continued to tighten lending standards for corporate clients, citing the rise in risks stemming from geopolitical events, including the war with Iran, according to Bloomberg.
Lenders have also reported tightening conditions for mortgage loans, consumer loans, and other types of household financing.
“The assessment of risks to economic outlook and banks’ lower willingness to take risks continue to be the main factors behind the tightening, as banks remain focused on geopolitical and energy-related risks.”
Monetary policy makers continue to assess the implications of the conflict in the Middle East and its recent escalation. Amid the intensification of military actions, energy prices have risen, with Brent crude oil prices exceeding $90 per barrel for the first time in over five weeks.
Bank lending plays a key role in stimulating economic activity, particularly corporate investment, and also serves as an early indicator of how changes in interest rates affect the overall economy.
