European Central Bank survey: Eurozone banks tighten credit access due to Middle East conflict.

A survey released by the European Central Bank on Tuesday showed that Eurozone banks tightened credit access in the three months leading up to March, and are expected to continue tightening this quarter, due to the Iran war driving up energy prices and financing costs. The ECB's quarterly bank lending survey of 21 Eurozone countries revealed that as the Iran conflict erupted in late February, financing conditions began to deteriorate. The tightening of loan approval standards by banks was larger than expected, and it was the most pronounced since the third quarter of 2023 for businesses. The ECB stated, "Rising risk perceptions for the economic outlook and declining risk-taking capacity of banks are the main reasons cited, with banks indicating in an open-ended question that geopolitical and energy developments are putting pressure on credit tightening." The ECB added, "Some banks also reported additional tightening pressures related to exposures with energy-intensive businesses and the Middle East region." The European Central Bank stated that in the three months leading up to June, banks are expected to "generally and significantly further tighten credit standards."