Eurozone banks tighten corporate lending as trade uncertainty becomes the main reason.

The quarterly bank lending survey published by the European Central Bank on Tuesday showed that Eurozone banks tightened access to corporate credit in the previous quarter and are expected to further tighten in the future amidst widespread economic uncertainty. The growth of credit for businesses and households has been accelerating for years, but the expansion rate is still below pre-pandemic levels, further indicating that although the Eurozone economy has some resilience, its expansion remains limited. Based on a survey of 153 large banks in the region, the European Central Bank stated: "Concerns about the outlook for businesses and the overall economy, as well as a decrease in banks' risk tolerance, are leading to tighter credit standards." Half of the surveyed banks indicated that trade policy uncertainty affected their lending behavior, and these factors are expected to continue to impact credit provision this year. The demand for credit remains resilient, with a slight increase in demand, a trend that is likely to continue in the first quarter.