AssetID: 55868865
Headline: UNCAPTIONED: Euro Zone Banks Tighten Lending as War Fears Weigh on Economy
Caption: Euro Zone Banks Tighten Lending as War Fears Weigh on Economy. Euro zone banks tightened access to credit during the second quarter as growing fears linked to the war in Iran made lenders more cautious, according to the ECB's latest Bank Lending Survey. Banks reported stricter lending for businesses, with the biggest impact felt by the automotive sector and energy-intensive manufacturers, which are more vulnerable to rising energy costs. Despite the tougher conditions, demand for corporate loans increased as companies sought additional financing to cope with higher operating costs and investment needs. The ECB said lenders rejected a greater share of loan applications and expect to tighten credit standards further across all loan categories during the third quarter. Demand for mortgages weakened sharply and is expected to decline further as households remain cautious amid an uncertain economic outlook. The central bank believes the conflict's effect on energy prices will slow growth across the 20-member euro area while keeping inflation above its 2% target. Although inflation has risen to around 3%, policymakers are still expected to leave interest rates unchanged in the near term because of sluggish economic activity. Instructions: THIS VIDEO MUST NOT BE EDITED FOR LENGTH TO COMBINE WITH OTHER CONTENT
Keywords: Current Affairs & Politics,Euro zone,European Central Bank,Lending Survey,mortgages,restriction,inflation,operational costs,energy,war,Iran,credit,business
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