The European Central Bank’s latest Survey on the Access to Finance of Enterprises found that bank lending conditions tightened further for euro area firms in the third quarter of 2026. Borrowing rates and collateral requirements increased, while loan availability fell more than financing needs. A substantial change in the survey sample also complicates interpretation of firms’ expectations for prices, costs and inflation. A net 46% of firms reported higher bank loan interest rates, up from 42% in the previous quarter. Collateral requirements increased for a net 14%, compared with 10%, while a net 27% reported higher fees and other financing costs, down from 31%. Bank loan availability declined for a net 5% of firms, against a net 2% reporting lower loan needs. The financing gap indicator remained positive at a net 2%, compared with 3% previously, indicating continued widening. More firms expected external financing availability to decline over the next three months. First-time respondents accounted for the majority of the sample, limiting comparisons of numerical expectations across survey rounds. Among firms participating in both rounds, the increase in selling price expectations was contained and median inflation expectations were broadly unchanged. Both measures rose significantly in the full sample.
European Central Bank survey finds further tightening of bank lending conditions for euro area firms
The European Central Bank’s latest survey found further tightening in euro area firms’ bank lending conditions in the third quarter of 2026, with a net 46% reporting higher loan interest rates, up from 42%. Loan availability fell more than financing needs, leaving the financing gap indicator positive. Changes in the respondent sample complicate interpretation of rising price and inflation expectations, which showed much smaller changes among firms participating in both survey rounds.