The European Central Bank published its euro area bank lending survey for the fourth quarter of 2024, showing that banks tightened credit standards again for loans to enterprises while mortgage credit standards were broadly unchanged and housing loan demand rose sharply. Consumer credit standards tightened further, alongside higher rejection rates for both corporate and consumer lending. For corporate lending, credit standards tightened on net by 7% of banks, the most pronounced since the third quarter of 2023, driven mainly by higher perceived risks and lower risk tolerance, particularly in Germany and France, while Italy reported easing. Overall terms for new corporate loans were broadly unchanged (net -1%) as lower lending rates and narrower margins were offset by stricter collateral requirements and other conditions such as covenants, and the share of rejected corporate loan applications increased (net 8%). Mortgage terms and conditions eased strongly (net -14%) on lower lending rates and margins, and net demand for housing loans rose to 42%, while credit standards on housing loans were broadly unchanged (net 1%) and rejection rates edged down (net -3%). For consumer credit, credit standards tightened further (net 6%), overall terms were unchanged in net terms, rejection rates increased (net 7%) and demand increased slightly (net 2%). Ad hoc findings pointed to slightly worse access to retail funding, money markets and debt securities, and banks reported higher capital requirements and increases in liquid and risk-weighted assets in response to regulatory and supervisory requirements, which they linked to a tightening impact on credit standards, especially for corporate lending. Banks also reported a sizeable tightening impact from non-performing loan ratios and other credit quality indicators on credit standards for corporate loans and consumer credit in the second half of 2024 (net 13% and 12% respectively), with no material impact for housing loans, and further tightening of credit standards across sectors such as commercial real estate, construction and parts of manufacturing. Looking ahead, banks expected a further net tightening of credit standards in the first quarter of 2025 for corporate loans (10%), housing loans (2%) and consumer credit (7%), with corporate loan demand broadly unchanged (net -1%) but continued increases in demand for housing loans (31%) and consumer credit (12%).

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