According to results from the survey, banks reported a net tightening of corporate credit in the first quarter of 2008 compared to Q4 in 2007, as well a tightening of credit standards for household loans and consumer credit.

Banks also emphasized that demand for loans to enterprises decreased in Q1, "a decline by comparison with the slightly positive net demand observed in the previous quarter", the survey said.

Demand for loans to households for house purchases also declined in the first quarter. However, net loan demands to consumers and households for other purposes remained essentially unchanged.

Looking to the next quarter, banks expect the tightening of credit standards to decrease relative to Q1.

Additionally, while net demand for loans to firms is still expected to fall, the decline is expected to be less severe than in the preceding quarter.

Banks are also expecting less tightening of credit standards for loans to households and a slower decline in the net demand for loans.

On the other hand, banks see further tightening in credit standards for loans to consumers in Q2, as well as to households for purposes other than home purchases. Net demand for loans is expected to remain essentially unchanged from the previous quarter.

Banks also reported that the credit crisis had more of an effect on credit standards for loans to firms than for loans to households.

By Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it