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(CEP News) Frankfurt - Money and credit growth continued to fall in the euro zone, while banks reported a further pronounced tightening of credit standards in the first quarter of 2009, the European Central Bank reported on Wednesday.
According to the ECB, the euro zone M3 money supply grew at 5.1% in the 12 months to March, down from both the 5.7% rate expected and February's 5.8% figure, which was revised down from an initial estimate of 5.9%. In the three months to March, M3 money supply grew 5.6%, down from the 6.4% print recorded during the three months to February. Economists, however, had expected a less pronounced fall to 5.9% for the period. Meanwhile, February's figure was revised down from an initial estimate of 6.5%. The central bank reported that the M1 component slowed to an annualized growth rate of 5.9%, while short-term deposits other than overnight deposits, increased 6.4%, down 1.4 percentage points from February's growth rate. Over the same period, the ECB noted that the total credit extended to euro area residents increased 5.2% year-over-year. However, this is down 0.7 percentage points from February's print. The annual rate of loans extended to the private sector also slowed in March, rising only 4.7%, down one percent from February's rate. The ECB reported that loans to non-financial corporations slowed to 6.3% from February's 7.7% figure, while loans to households grew 0.4% in March from the previous month's 0.7% year-over-year rate. The ECB also published its quarterly bank lending survey for April and noted that 43% of respondents reported a net tightening of credit standards in the first quarter of 2009 compared to the previous quarter. However, this proportion is down by 21 percentage points from the proportion reporting a net increase in standards in Q4 2008. "This could point to some stabilisation of the current tightening cycle," the ECB said in its report. Looking to the second quarter of this year, banks look for credit standards to ease further, including credit standards on loans to households, according to the lending report. Written by CEP News European Staff,
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, edited by Stephen Huebl,
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