July 25, 2012 / 8:09 AM / 5 years ago

Banks expect to tighten loan standards further, demand weak: ECB

FRANKFURT (Reuters) - Banks made it harder for firms to borrow in the second quarter, saw a slump in demand, a trend they expect to continue in the coming months, the European Central Bank said on Wednesday as the euro zone debt crisis deepened.

In its latest quarterly Bank Lending Survey, the ECB said that a net 10 percent of the euro zone banks that took part tightened their criteria firms to borrow in the second quarter up slightly from 9 percent in the first quarter.

The survey, which was conducted between June 21st and July 5th, added that banks expect to see demand from firms, consumers and house buyers to continue to weaken in the third quarter and they believe they will continue to tighten their lending rules at a similar rate.

For a copy of the survey, click on: here

Reporting by Eva Kuehnen and Marc Jones

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