Bank loan approval criteria tightened further, albeit moderately, in the fourth quarter of 2023, according to a bank lending survey by the European Central Bank (ECB) published this week.
As the risk of a recession looms, banks’ risk aversion has increased and is a major driver of the tightening of credit standards for loans to firms and households, according to the study. Economic growth will remain weak and limited to 0.8% in 2024, say ECB projections.
